Thinking
Breaking a Brand's Returns Challenge
With 1,6 – 5,4% of shopping basket revenue lost managing returns, Direct-to-Consumer Retailer brands lose US$117 million profit for every US$1 billion in retail sales. The automated fruit size sorting ‘machine’ solution idea dramatically unlocked online apparel, fashion and footwear retailers to reduce returns by 48 per cent without consumer intervention. It slashed returns management costs, increased brand profits, and gave a competitive advantage to amplify customer’s experience.
A Brand's Survival in One Lesson
Henry Hazlitt’s book “Economics in One Lesson” holds the key to any designer lifestyle brands survival and success.
Applied reveals the paradox of retail success. One brand beat a policy to double it's operating (production/transportation) efficiency metric (+10%). Tracing the unintended consequence showed a €874 million loss in group retail sales (-3% YoY). From a successful policy.
The $1.75 trillion Retail Ghost Economy
The $1.75 Trillion Retail Ghost Economy - The lost retail revenue from sales returns, overstocks and out-of-stocks.
For a typical retailer, the losses are the equivalent of increasing revenue by 11.7 percent. Another way, retailers currently lose 11.7 percent of revenue due to the combined impact of overstocks, out-of-stocks and needless returns (preventable returns). Imagine adding $117 million for every $1B in retail sales.