For retailers, it may pay to take another look at the returns process. According to data from Boston Consulting Group in the 2019 U.S. and Specialty Retail Outlook, it is more important to have easy returns and pickup in-store than an enjoyable shopping experience.
With in-store returns showing an increased demand, there is a potential opportunity for point of contact in the evolving of the physical store, said BCG. Almost 40 percent of experts told the company allowing easy returns is the most important consumer need.
“You want [returns] integrated in a very dynamic part of the store because the value proposition for the retailer is the opportunity for impulse selling when you’re doing a return,” said Christine Barton, managing director and senior partner at BCG. “You’re trying to make [returns] as engaging and dynamic of an experience so [retailers] can either capture a customer into a department, into a loyalty program, or otherwise engage with consumers.”
Consumer experience, to drive same-store growth, was considered the overall top value-creation lever in BCG’s findings, with integration to online channels, heightened quality of service and more delivery options being cited by BCG as important for improving the in-store experience. Further, 40 percent of experts recommended improving customer experience across all channels including in-store, mobile and online.
Meanwhile, companies also recognize the value in resale to meet consumer demand. Resale is a potential white space opportunity, says BCG, though few have plans to incorporate it, held back by potentially high investment costs, relevance to existing models and the ability to generate a reasonable return.
“I do think it is an alternative business model that will scale,” Barton explained. “Companies or brands have to think about the rightful place and how they want to approach that and whether it is an organically built offering, whether that’s through a partnership with existing platforms, whether that’s through equity ownership, or more extremely whether that’s through mergers and acquisitions.”
Interestingly, when looking at consumer behavior across generations, Barton says demand for resale is disproportionately coming from Gen X, with Gen X and Gen Z accounting for the majority of supply, and Millennials showing slightly less participation.
“Instead of just buying luxury icons and holding them in their closet, the Millennial generation is turning those over and using the dollars that they get from that to reinvest in other collections or other luxury items,” said Barton, “but the people that are disproportionately buying and holding it is Gen X.”
Further, as companies continue to focus on the consumer, BCG says “personalization” is less likely to be a buzzword found in investor reports. According to the company, this is likely because there is no proven model or data infrastructure. Instead, investor reports are more likely to utilize the phrases “customer insights” and “customer experience” or “consumer-centric.”
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