Actionable Insights From APT's Retail Practice
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Rethinking Return Policies

March 4th, 2016 | Posted by Jack Parker in Retail - (Comments Off on Rethinking Return Policies)

Returns have always been expensive for retailers, and the number of returns is only increasing with a growing percentage of sales coming through digital channels: in 2014 alone, $284 billion of product was returned. Figuring out how to lower that number without causing customer attrition is a major challenge facing retailers. Should retailers limit return windows? By how much, and on which types of items? Will stricter policies intimidate customers from transacting?

A recent Washington Post article details a study that dove into these kinds of questions, examining how retailer return policies have historically impacted customer behavior. Unsurprisingly, more lenient policies were strongly correlated with higher return rates. These types of policies, however, were even more strongly correlated with higher sales, indicating that customers were more likely to make purchases given the security of a strong return policy.

Based on the study’s findings, it appears that there may be opportunities for retailers to grow sales by making return policies more forgiving. But how will these types of changes actually play out in market? Will customers purchase more in total, netting out returns? Will a more lenient policy increase shrink? If so, by how much?

Rather than relying on intuition or correlations, retailers will need to understand how customers will react before enacting broad changes. The only way to gain this insight is with a Test & Learn approach: test a policy change in a subset of stores, and compare performance to a control group of stores that maintains the status quo. Then, retailers can isolate the action’s true incremental impact on KPIs like return rate, sales, shrink, and customer satisfaction. Using these small scale in-market experiments, retailers can answer the following types of questions:

  • Return Window – What will happen if we extend our return window? Will sales increase? If so, will that outweigh any corresponding increase in returns and shrink?
  • Process – What will be the impact of offering free shipping on returns? Should we move to a stricter strategy for offering refunds to cut down on fraudulent behavior and/or losses from products that can’t be resold?
  • Omnichannel Strategies – How can we profitably allow online orders to be returned in stores?
  • Policy Variation – Are there opportunities to target policy variations to different product categories and customers?

As ecommerce continues to grow and omnichannel customer service becomes more critical, costs associated with returns will continue to eat into retailers’ bottom lines. By testing new ideas, executives can hone in on which return policies will work best for their business.

APT Founder and Chairman Discusses “Click-and-Collect”

January 29th, 2016 | Posted by Sarah Griswold in Retail | Uncategorized - (Comments Off on APT Founder and Chairman Discusses “Click-and-Collect”)

In an interview with CNBC, APT Chairman Jim Manzi provides his perspective on the growth of “click-and-collect” offerings by retailers.

Join Us at NRF For a Big Ideas Session: Smart Data, Not Just Big Data

January 14th, 2016 | Posted by MHarper in Retail - (Comments Off on Join Us at NRF For a Big Ideas Session: Smart Data, Not Just Big Data)

Join APT this Monday, January 18th for a Big Ideas session about “Smart Data, Not Just Big Data”. We’ll be discussing innovations that retailers are considering today and why it’s important to use a Test & Learn approach to understand whether each of these ideas work. Executives from APT clients will present at the session.

Click here for more information.

Fashioning A Winning Strategy: The Top 5 Trends For Apparel Retailers In 2016

January 4th, 2016 | Posted by Sarah Griswold in Retail | Uncategorized - (Comments Off on Fashioning A Winning Strategy: The Top 5 Trends For Apparel Retailers In 2016)

In an article featured in Retailing Today, APT SVP John Howard predicts five trends that will define 2016 for apparel retailers. He writes, “Recent innovations include mobile app and in-store technologies, multichannel fulfillment solutions, and coordinated cross-channel promotions. These kinds of initiatives will continue to be top of mind in 2016, particularly as consumer expectation for a seamless and personalized experience–and deep discounts–continues to grow.”

Fueling Innovation In 2016: Top Trends In Convenience Retail

December 22nd, 2015 | Posted by Sarah Griswold in Retail | Uncategorized - (Comments Off on Fueling Innovation In 2016: Top Trends In Convenience Retail)

In an article featured in Convenience Store Decisions, APT SVP Marek Polonski discusses the top trends that convenience retailers can expect to shape 2016. He writes, “Over the past 12 months, the industry has been abuzz with M&A activity, new in-store technologies and oscillating fuel prices. As the rate of innovation continues to increase, there will be a number of opportunities for convenience retailers to gain a competitive advantage, but only if they navigate the industry shifts correctly.”

Top 5 Trends That Will Shape Grocery In 2016

December 15th, 2015 | Posted by Sarah Griswold in Retail | Uncategorized - (Comments Off on Top 5 Trends That Will Shape Grocery In 2016)

In an article for Progressive Grocer, APT VP Jeff Campbell discusses the top 5 trends that will shape grocery in 2016, which include a focus on specialty departments and shoppability.

How to Monetize Your Loyalty Program

November 4th, 2015 | Posted by Sarah Griswold in Retail | Uncategorized - (Comments Off on How to Monetize Your Loyalty Program)

In an article featured on Customer Think, APT Principal Varun Kishore writes about the challenges associated with customer loyalty programs and what organizations should consider when designing offers and communications.

How to keep brick-and-mortar retail relevant in the digital age

November 4th, 2015 | Posted by Haley Jackson in Retail - (Comments Off on How to keep brick-and-mortar retail relevant in the digital age)

APT Senior Vice President Rupert Naylor recently authored an article published in Real Business titled “How to keep brick-and-mortar retail relevant in the digital age.” In the piece, Naylor comments on the evolving role of the physical channel and how retailers can succeed in the changing landscape. He explains, “With so many innovative ideas on the table and so much potential value at stake, the current retail landscape is ripe for business experimentation. While intuition may lead decision-makers to implement an initiative, its incremental profit impact cannot be accurately measured without first testing the idea with a subset of markets, stores, employees, or customers, and considering the impact in store, online and on mobile devices in a holistic way.”

Read the full article here.

How big data is changing retail and restaurant businesses

October 28th, 2015 | Posted by MHarper in Retail | Uncategorized - (Comments Off on How big data is changing retail and restaurant businesses)

APT is featured in an Information Age article on how retailers and restaurants can use big data to gain an accurate view of performance and try new ideas to improve profitability. Click here to read the full article, which includes insights from the APT Index.

How To Keep Brick-and-Mortar Retail Relevant In The Digital Age

October 27th, 2015 | Posted by Sarah Griswold in Retail | Uncategorized - (Comments Off on How To Keep Brick-and-Mortar Retail Relevant In The Digital Age)

In an article published in Real Business, APT SVP Rupert Naylor discusses why the physical channel remains critical for retailers. He notes, “While the physical channel remains essential, its role in a customer’s purchase journey is undoubtedly evolving. Retailers must also adapt, to ensure that the shopping experience they provide resonates with consumers.”