Maybe that Black Friday flat screen wasn’t such a good idea
There’s nothing wrong with most of the consumer electronics items that get returned to stores, according to new research by Accenture. A study by the firm found that defects only account for about 5% of the returns and the rest of the time buyers’ remorse (27%) or a perceived flaw (68%) results in the item being returned.
Shoppers return stuff for all kinds of crazy reasons, especially this time of year, as those caught up in the feeding frenzy of Black Friday have an opportunity to contemplate the wisdom of purchases in the solitude of their home. In the case of the electronics category returns are a gigantic headache and amount to a nearly $17 billion problem, according to Accenture. That figure is 21% higher than it was in 2007 when the firm last conducted the study looking at such costs as receiving, assessing, repairing, reboxing, restocking and reselling returned products.
“These high consumer electronics return rates are unsustainable in a sector with brutal competition and thin margins,” said Mitch Cline, managing director of Accenture’s Electronics and High-Tech group. “Manufacturers and retailers should do more to differentiate their customer service by helping consumers understand, set up, use and optimize the products they purchase. Most companies invest considerable sums to manage returns, but need to refocus their strategies on proactively preventing returns through customer education and aftermarket support.”
As is often the case when a consulting firm conducts a study and publishes research highlighting an industry problem, it turns out they also happen to be selling a solution and that is the case with Accenture.
“Accenture has proprietary software and processes that can enable retailers and manufacturers to reduce labor and other costs throughout the product returns process,” said Janet Hoffman, managing director of Accenture’s Retail practice.
It could be a worthwhile investment as the firm estimates a 1% reduction in the 68% of returns that fall into the “no trouble found” classification could translate to annual savings of 4% in return and repair costs, or $21 million for a typical large consumer electronics manufacturer and $16 million for the average consumer electronics retailer.
Among the steps retailers and manufacturers can take to achieve such savings, Accenture recommends companies measure the impact of returns, develop consumer product-education classes, offer delivery and set-up services to consumers for highly technical products, invest in proactive customer service on high-cost/high-return products, provide multiple service options and create simpler product designs.