We're all set up at Royal Lancaster London, ready for the 10th anniversary of The Delivery Conference. The agenda is jam-packed with keynotes and panel sessions and whilst the content is bursting at the seams, sadly returns has not featured as a topic. So we’ve decided to take things into our own hands to fill in the blanks! Rather than simply providing a commentary of the conference, we’ll be spotting missed opportunities to put returns on the agenda by sharing some of our expertise in this space.
The ReBOUND team are here in force, ready to talk returns and we’ll be sharing our returns expertise in this blog too.
Welcome to ReBOUND’s alternative agenda...
We’ll be covering some of the key sessions today and adding in some much needed knowledge on returns.
We'll be bringing you more updates from TDC Global at 2pm and 4pm, so stay tuned to pick up the key takeaways from the day as it unwinds.
As usual, MetaPack Founder Patrick Wall kicks off the conference to briefly look-back at peak and outline the days agenda. He touched on the “underwhelming” peak the retail industry saw in 2018, sharing a graph from IMRG indicating that the growth recorded in December 2018 was the lowest in 18 years. Patrick believes this is down to issues with the management of data systems, and explains that this has to be a key area of focus for retailers moving forward.
However, with peak firmly behind us (phew!), and a quick chat about the ‘B’ word, Patrick goes on to discuss what retail trends we can expect to see over coming years.
We’ve heard an increasing amount of talk about online marketplaces, particularly over the last year, and Patrick continues this discussion, claiming that we can expect to see them dominate in the years to come. Furthermore, with the constant news that the high street failing, it’s unsurprising that Patrick believes ”the most significant issue is around the consumer experience in store” with significantly more investment needed. Patrick concludes his opening address by highlighting the fact that we are seeing an increase in retailers wanting to know who their most loyal customers are. (ReBOUND Side Note: You need efficient returns data to identify these shoppers!)
The Future Of Retail
With much of this centered around changes in consumer behaviour, Howard Saunders’ (Retail Futurist, Twenty Second and Fifth) presentation ‘Brands On The Run’ is the perfect successor to Patrick’s opening address.
Howard Saunders gives us a madly energetic start to the day. Give me a mug of what he’s drinking! After a quick comedic touch on all the doom and gloom we see in the world, Howard dives into the disruption the retail industry is experiencing. Howard believes the age of disruption can be ‘blamed’ on the rise of mobile phone, which he comically refers to as ‘GOD’ or ‘Global Overlords of Data’. It is these tiny devices that are shaping the way we consume. Through ‘GOD’ “we no longer have to go to the stuff, the stuff will come to us”. This simple comment sums up eCommerce neatly, especially with voice recognition becoming increasingly popular.
He goes on to explain that Alexa is “the beast that we have invited into our home”. Voice tech is always listening to us, learning about us and hyper targeting us to deliver overly personalised advertising, playing into the emotional commerce that Howard believes is now the new way to compete on the high street.
Retailers no longer need to deliver stores, they need to deliver a “brand playground”, a notion which is not overtly about shoppers being asked to spend money but about “ideas and imagination” as Howard explains. We’re now moving from a “function economy to a feel economy” and retailers need to reach out and make us feel something, rather than pushing the hard sell. Dyson is now like a trip to the science museum, and Starbucks has become a day out to a coffee shop, giving customers a one-of-a-kind emotive experience.
In a world where we have access to everything, creativity is the next landgrab and the future of retail means that content will be manipulated to give us things we want, before we even know it. Howard closes his high energy presentation with a final thought of: “The digital world will make the human touch more precious than ever”
ReBOUND Comment: This whirlwind of a presentation is exciting for retail. Talking about shopping in a “brand playground” is really cool, but let’s not forget that your shoppers basic function is not properly served when the returns journey is so broken. How can we make the in-store returns experience seamless, rather than a painful over the counter interaction? 85% of shoppers still view returns as a barrier to purchasing. The returns experience has long been left behind. If Inventing creative in-store experiences is the future, let’s bring returns into the present at least!
It's All About Data
The agenda proceeds with the spotlight shifting to a topic we’ve been talking about for quite some time now - data.
Xuan Jin (Lead Solutions Architect, Alibaba) opens up the topic by explaining how retailers need to make the supply chain digitised, and back up their logisitcs with data, and we couldn't agree more! Having just told us about Hema; Alibaba’s fully digitised store which also combines a restaurant, and fulfilment centre combo, he humbly concludes that “New retail is not another form of retail, it’s just another way of doing retail”
We’re firm believers that data is the key to fully understanding your customers, so it was great to hear that Martijn Bertisen (UK Sales Director, Google) agrees. Through technology, we’re now connected to retailers 24/7 and are being presented with a plethora of choice, and consumers are expecting retailers to know them and deliver a personalised experience Martijn explains.
Companies that are leading the way in this new landscape are the ones helping consumers cut through the noise. We love Netflix and Spotify because they deliver what we want and what we might like, when we want it. Martijn believes the future of retail lies in AI and machine learning and how retailers can use these to deliver clearer, personalised experiences that stick.
ReBOUND Comment: With some exciting insight into how the retail industry can use tech and data to get ahead, retailers still need to get the basics right first. AI and machine learning are great in principle, but should this technology take priority over fixing returns? Many retailers still have huge data gaps when it comes to their return. Investing in the future seems redundant when basic practices that should be baked into the foundation on which retailers function are missing.
CHECK BACK AT 2PM FOR MORE UPDATES LIVE FROM TDC - TIME FOR A COFFEE!
We’re back and well caffeinated, ready to hear more presentations!
We dive straight back into the agenda with a presentation from Malcolm Barrell (CEO, P2P Mail), focusing on customer experience. Delivery and international eCommerce are the hot topics here, with Malcolm revealing that cross-border eCommerce is expected to reach $900bn in 2020 with markets such as China, Asia and the USA thriving.
Malcolm quite rightly talks about how offering a range of delivery options to the international shopper is critical, with 50% of international shoppers abandoning the checkout if choice is not available. He goes on to explain other ways to convert international shoppers through language translation, payment choice and website optimisation.
This presentation concludes by giving returns their first mention of the day, talking about the importance of displaying your returns policy clearly, this includes at every stage of the buying journey.
ReBOUND Comment: Great to hear returns get their first mention of the day! What didn’t get mentioned however is that choice is essential for returns too, not just delivery. 92% of shoppers say that the range of return options is an important consideration when deciding where to shop. As such, retailers need to offer international shoppers a personalised returns policy, presenting a range of return options local to them.
Moving on with a presentation from Holland and Barrett. Starting with a bit of background into Holland and Barrett, Emma Mead brings a passionate presentation about how Holland and Barrett are putting their customers at the heart of everything they do. The focus here is on getting to know who your customers are and exactly what they want buy and how they behave.
With a 5.7% contact rate, Emma talks about how Holland and Barrett are trying to reduce calls that they can’t add any value to such as “where is my order?” calls, so that they can focus on really helping customers in a valuable way through advice and recommendations.
ReBOUND Comment: Emma makes lots of great points, however a huge opportunity was missed to talk about how returns matter the shopper. Fully understanding the behaviours of your customers means looking at how and why they return. Emma explains how Holland and Barrett review all the pain points for customers on a weekly basis, however returns aren’t mentioned as being part of it. When looking at reducing customer contact calls, retailers need to not only look at what percentage of these calls are order related but how also many are refund and return related. Keeping customers informed about their refund and offering them what they want can help reduce these calls.
Bruce Harryman (Senior Manager Distribution Network Planning, John Lewis & Partners) introduces a new topic for the day: demand planning. Offering insight into the fact that no day, and indeed to hour is the same when it comes to customer buying behaviour - even the weather can change how customers shop! This of course poses challenges for demand planning, hence Bruce’s emphasis on understanding your customers buying behaviour.
Returns are obviously a key factor of demand planning, so we were pleased to here Bruce Harryman giving the topic the stage time it deserves. Interestingly, Bruce draws correlations between the price of the product and the way it is returned, revealing that the more expensive an fashion item is, the more likely it is to be returned. There was also an interesting correlation between the cost of an item and the speed at which it gets returned, with customers who spend the most (quite rightly!) want their money back the quickest. Bruce ends the talk of returns by highlighting that the more expensive an item it, the more likely it is the shopper will want to return the product to store, so it’s crucial retailers are offering this as an option to their shoppers.
Back to Data
All Businesses struggle with strategy, culture and being data-centric. Jeremy Mitchell (Director, Data Science & Co-Founder, Data Mettle) guides us through how to start out in this minefield. We start off with an easy analogy “how to categorise your cucumbers”. You read that right. We’re shown a photo on screen of rows of different shaped cucumbers with a grading system generated by machine learning. As shoppers, we’re drawn to the most aesthetic looking cucumbers, so the straightest cucumbers sell first. So how do you get from categorising cucumbers to categorising customers?
Jeremy advises 4 steps to start with a simple model, like the cucumber farmer did. Start with:
- Tasks that take a long time a long time and are repetitive.
- Error prone
- Specific about what the problem is
- Specific about why it's valuable.
Back in the eCom space, he advises to exercise caution when acting on the findings. Remember the story about US retailer Target who began marketing to a teenager with coupons for nappies and other baby related paraphernalia, accidentally exposing her teen pregnancy to her parents?
ReBOUND Comment: How can we leverage returns data to arm marketing teams with smart consumer insight on returns behaviour without running the same risk? Around 60% of returns are sent back due to sizing issues, but this data needs to be treated with sensitivity. If a retailer can spot that a particular shopper always buys a size 12, but never keeps that size, they may want to personalise promotions or offer product suggestions using this data. But a pop-up at the basket to tell the woman that she ought to buy the next size up may offend and isolate this shopper at the point of purchase. Profiling shoppers based on returns data needs to strike a balance between personalisation and creepiness, or indeed causing offence.
That is if the retailer even has the right tools to measure returns in the first pace!
TIME FOR A SPOT OF LUNCH NOW BUT WE'LL BE BACK AT 5PM TO CONCLUDE THE AFTERNOON!
Panel Session: The Changing Fundamentals of the Final Mile
Rounding off the conference we have two panel sessions, the first of which is on ‘The Changing Fundamentals of the Final Mile’. The panel kick off with a discussion around sustainability, and the cost this brings for retailers. With the general consensus being that sustainability isn’t an issue that can be ignored by any party (we agree!), conversation quickly turns to new and innovative electric vehicles. The idea is even suggested that for populated inner cities such as London, final mile on foot should be considered. Doug MacGrain believes it’s essential to managing expectations and that a communication with the end user is free, and a shift in their behaviour would drive progress when it comes to the final mile.
Duncan License (VP Product, Metapack) concludes the panel with some food for thought: how do we bring innovation in the face of regulation? What consumers want is speed and convenience, which can be a really unsustainable model for the carriers. By managing expectations, retailers and carriers can work together to deliver a sustainable model that reaches expectations, but shoppers need to be willing to make this change.
ReBOUND Comments: The term ‘the final mile’ implies the end of the journey, which we, and anyone who has every received a return, know isn’t the case. With so much money and time spent on optimising the delivery proposition, it’s hard time the same investment was given to returns. Considered as the last touch point for a shopper, the courier represents the brand at the point they get what they bought. It’s often forgotten that the returns journey also begins with this interaction.
Panel: Who owns the relationship with the customer?
Who should own the relationship with the customer? The brand? The retailer or marketplace? The carrier? It’s universally agreed by the panel that while the retailer owns the primary relationship with the customer, carriers are an extension of the retailers brand and therefore play a crucial role in this relationship too. As such, retailers need to make sure they’re building up the right relationship with their carriers to make sure this relationship is properly managed and communicated. It should be a partnership and a united front that is presented to the end consumer.
With conversation turning to the consumer, it is pointed out (somewhat controversially) that customers should not have an incentive to build the relationship. The customer wants to be free to make the decisions they want, its the retailers job to make sure that in the face of choice and freedom, they are the ones chosen.
ReBOUND Comments: With some great points made, working hard to maintain this relationship can prove worthless if the shopper is forgotten about and left to work it out for themselves as soon as they want to make a return. A great relationship doesn’t end as soon as they hit ‘buy’. It’s no secret that it’s cheaper to maintain an loyal customer than convert a new one, and a nightmare returns process is a sure fire way to send a would-have-been loyal customer running for the hills.
Whilst returns (unsurprisingly) didn’t get the stage time the deserve, we still heard some interesting presentations, particularly from retailers. If today has proved anything, it’s that the consumer landscape is rapidly changing, with customers having higher expectations now than ever. Retailers are looking for new way to compete to get ahead of the competition and if today is anything to go by, data and an enhanced customer experience seems to be the way to do it - and we couldn’t agree more.
Whilst returns weren’t a feature of today’s agenda, we’ve come to expect this as the norm from industry conferences, hench the launch of our Returns Revolution Conference last year, where returns are the only thing on the agenda.