REVER (YC S22)’s Post

Say goodbye to free returns. Retailers are finally pushing back on the wave of returns - legitimate or not - and are becoming less willing to absorb the costs. Some retailers are implementing return and restocking fees. How will consumers adjust their shopping behaviors if return fees become the norm? According to the survey I ran on Suzy with a nationally representative audience of 329 Americans age 21-65: 🚫 62% of shoppers are unwilling to pay a return fee 🔍 56% of shoppers would take more careful consideration before purchasing items 🆕 54% of shoppers will be more cautious when purchasing from new brands or retailers When asked what reason would be the most acceptable to charge a return for, consumers agreed on buyer's remorse. My personal take: The poor behavior of some shoppers may force policies that will make consumers more risk adverse, with negative consequences to new and emerging brands in particular. Technology and AI can play a role in helping buyers make more confident decisions, but lesser known brands may have higher customer acquisition costs. Based on my personal experience purchasing new brands that I discover on Instagram, it will be interesting to see the effect on social ads in particular. What do you think brands and retailers can do to reduce returns without losing customers? #retail

📦 Closing the Strategy Loop on Retail Returns   Brands and retailers have struggled to mitigate retail’s growing returns, but due to a new report from the National Retail Federation, it appears that new retail strategies are beginning to work.   Consumer #returns within the #retail industry hit an all-time high in 2022: $816 billion worth of merchandise, or approximately 16.5% of all purchased goods were returned to retailers, according to the National Retail Federation and Appriss Retail annual report.   Per this insightful article, we need to continue to embrace #AI and #innovation, taking it from the forward-filling standpoint and introducing it into returns to meet the customer where they’re at is vital moving forward.   #BrandStrategy #technology #HappyReturns #UPSCapital #UPS #Insureshield

"𝐏𝐬𝐲𝐜𝐡𝐨𝐥𝐨𝐠𝐢𝐜𝐚𝐥 𝐏𝐫𝐢𝐜𝐢𝐧𝐠 𝐒𝐭𝐫𝐚𝐭𝐞𝐠𝐲: 𝐂𝐡𝐚𝐫𝐦 𝐏𝐫𝐢𝐜𝐢𝐧𝐠" Charm pricing, also known as odd pricing, is a psychological pricing strategy that involves setting prices just below a round number, often ending in .99, .95, or similar figures. The goal is to make the price appear lower than it actually is, which can influence consumer perceptions and drive sales. The practice of odd pricing dates back to the late 19th century when retailers started setting prices just below whole numbers to prevent theft and ensure that cashiers would open the cash register and provide change, thereby recording the sale. 𝐏𝐬𝐲𝐜𝐡𝐨𝐥𝐨𝐠𝐢𝐜𝐚𝐥 𝐈𝐦𝐩𝐚𝐜𝐭 1. Left-Digit Effect: Consumers tend to focus on the left-most digit of a price. For example, a price of $9.99 is perceived as significantly lower than $10.00, even though the difference is just one cent. This is because the left digit (9) suggests a lower price bracket than the next whole number (10). 2. Price Perception: The use of .99 or .95 endings creates a perception of a deal or bargain. This can make the product seem more affordable and attractive to price-sensitive customers. 𝐂𝐨𝐧𝐬𝐮𝐦𝐞𝐫 𝐁𝐞𝐡𝐚𝐯𝐢𝐨𝐫 1. Impulse Buying: Charm pricing can encourage impulse purchases by making prices appear more attractive and affordable at a glance. 2. Perceived Value: Consumers often associate odd prices with discounts or special offers, increasing the perceived value of the product. 𝐄𝐱𝐚𝐦𝐩𝐥𝐞𝐬 𝐨𝐟 𝐂𝐡𝐚𝐫𝐦 𝐩𝐫𝐢𝐜𝐢𝐧𝐠 1. Grocery Stores: Products priced at $1.99, $2.49, and $4.95 to encourage shoppers to perceive them as bargains. 2. Clothing Retailers: Fashion items priced at $19.95, $39.99, or $59.95 to create a perception of discounted value and attract budget-conscious consumers. 3. Online Marketplaces: E-commerce sites listing products at prices like $14.99, $24.95, or $79.99 to enhance perceived affordability and compete with other online retailers. #CharmPricing #OddPricing #PsychologicalPricingStrategy

NEW BLOG - Imagine walking into your favorite store expecting a big sale, only to find a final markdown clearance. As a customer, you might find great deals, but for retailers, it signals missed opportunities and profit loss. Many retailers confuse promo problems with markdown problems, costing them more than just profits. In our series on retail promotions, we first discussed the diminishing returns of discounting in a promo-saturated market. The second part examined how misaligned pricing and discounting strategies can lead to failures. In this post, we explore how retailers often fail to differentiate between markdown and promo problems, resulting in suboptimal strategies and margin erosion. Read the blog: https://bit.ly/3wYcCB8 Fabrizio Fantini #toolsgroup #retail #AI #pricing

If you work with companies selling #B2B, #B2C or #D2C and who are streamlining their online shopping experience for their customers, feel free to share this upcoming discussion hosted by Acumatica #eCommerce #EDI #omnichannel #retail

Where is there genuine growth? At Shoptalk I was talking to a manufacturer who was bemoaning the fact that their volumes were declining as a result of recent price rises. They asked me if any large scale retailer or manufacturer was seeing genuine (volume and value) growth and if so, how? My response was immediate, Walmart is growing, above inflation, despite aggressive competition from the likes of Shein & Temu. Walmart said in its Q1 results that a large proportion of its growth is coming from marketplace sellers, and in particular, higher value marketplace sellers. That is despite an onslaught of competition from Shein and Temu, selling cheap priced goods in exactly the same categories that l Walmart Marketplace sell. Through its marketplace Walmart are creating incremental demand. A broader range brings more customers, more customers brings more sellers, more sellers brings a broader range. This is the Amazon flywheel but put to work for Walmart, and it works despite Shein and Temu (and others) pushing heavily into the same categories with often significantly cheaper alternatives. Every manufacturer could be selling on Walmart Marketplace. Even P&G, Unilever and L’Oreal have products that Walmart do not range in store. Here is an opportunity for all manufacturers to increase their distribution on secondary & tertiary brands, to trade them differently, to activate them via an extensive media and selling platform, generating significant reach and substantially increasing revenue. And don’t forget, it isn’t just Walmart and Amazon that have a marketplace. Carrefour, B&Q, Decathlon, BestBuy, Kroger, Tesco and many more have all opened their websites to 3rd party sellers. Marketplace opportunities now exist all over the world. The key questions are 1) Do your target customers want to buy through them? 2) will you build the capability to sell through them? 3) will your competitors build the capability to sell through them? 4) are you prepared to trade that part of your business differently to your traditional & online business through the same retailers? Success will require a genuine ‘omni-channel’ approach & capabilities. Walmart shows there is growth to be gained for those manufacturers willing to build the capabilities, knowledge and expertise. What’s stopping you? The expansion of the flywheel model of retailing is also an opportunity for manufacturers to step back and think about what the demand creation flywheel looks like for their business, brands and customers? Going forward, I believe that manufacturers will need to get good at creating demand again, not just through marketing but through other means. Simply put, if existing manufacturers aren’t satisfying customer demand then new manufacturers will. As capability is now the only barrier to entry, new entrants quickly become challengers & genuine competitors. #digitalcommerce #ecommerce #retail #retailindustry #strategy #cpg #cpgindustry #fmcg #fmcgindustry #omnichannel

Prediction: “Endless aisle” is going to change retail. Especially for SMBs, it lets David compete like Goliath. This concept boils down to letting consumers order from a virtual store while shopping in person, helping bridge the gap between in-store and online, and removing the limitations of physical inventory. Small retailers have historically had trouble competing with larger stores’ inventory and distribution channels They end up having to gamble on acquiring more merchandise and risk holding excess inventory, or being overly cautious and causing potential stockouts. Endless aisle changes that dynamic. In fact, we’re already seeing big and small retailers alike plunge in: Menswear retailer Bonobos treat their stores like showrooms, staff act like concierges and shoppers can browse a full range of selections, and your order gets shipped out. This means that they can maintain low in-house inventory. Best Buy uses a five-prong approach to leverage tech: expanded product range, in-store kiosks, fulfillment options, online-offline integration and product reviews. Smaller businesses can learn from these two examples by defining their endless aisle strategy, investing in tech and automation, and focusing on unique customer experiences. For other retailers in my network, I’d love to know your thoughts on endless aisle? Is it practical for SMBs to adopt? Have you personally seen any success stories?

Who has heard of #BOPIS or #BORIS? A quick hint - they are not two guys from eastern Europe. Yesterday I had a great conversation with John D Lee about turning E-commerce returns from a liability into an opportunity. Some retailers send many returns directly to landfill instead of reselling them because it's more cost-effective. In 2022 alone, companies sent over 9.5 billion pounds of returned products straight to landfill. Many #retailers are laser-focused on driving sales by encouraging buyers to add more products to their shopping carts. But have we considered the impact on the bottom line if we could harness the power of analytics from the returns process to drive more profitability per transaction? #E-commerce returns, especially in sectors like fashion, footwear, and consumer electronics, represent significant financial implications. For example: - **Fashion Retailers**: $504 billion in returns annually. - **Footwear and Accessories**: $21.6 billion. - **Consumer Electronics**: $55 billion. What if we could transform these returns from a costly liability into a strategic opportunity? - Better #Analytics for Better Decisions By leveraging data from the returns process, retailers can gain valuable insights into product quality, customer preferences, and supply chain efficiency. This information can be used to: - Improve product descriptions and images to better match customer expectations. - Optimize inventory by identifying high-return items and adjusting procurement strategies. - Enhance customer satisfaction with more accurate sizing, better materials, and fewer defects. - #Sustainability and Customer #Loyalty A streamlined return process not only saves costs but also promotes sustainability. Efficient handling of returns can reduce waste and carbon emissions, appealing to environmentally-conscious consumers. Moreover, a hassle-free return policy fosters customer loyalty, encouraging repeat purchases and long-term engagement. - BOPIS, BOSS, BORIS: The Winning Trifecta for Modern Retailers Using BOPIS (Buy Online, Pick Up In-Store), BOSS (Buy Online, Ship to Store), and BORIS (Buy Online, Return In-Store) can significantly limit the need to use carriers to ship and return orders. It is the customer who makes the trips, which can reduce your shipping and return costs. In addition, less transport equals a lower carbon impact, which is good news for our planet. - Transforming Returns into a Strategic Asset Turning returns into an asset requires a combination of technology and strategy. Implementing automated return systems, utilizing #augmented reality for virtual try-ons, and maintaining transparent communication about return policies are steps in the right direction. Companies like Zappos Family of Companies and Nordstrom have set benchmarks with their customer-centric return policies, driving higher customer satisfaction and loyalty. At TechBlocks We believe better returns for brands, customers, and the planet.

Maths for seasonal commerce. Imagine purchasing 10 items for $50 and selling them for $100. At first glance, you'd reckon a 50% margin, wouldn't you? But, what unfolds when you've sold half of those? What's your margin then? Actually, you haven't achieved a 50% margin. While your unit margin stands at 50%, selling just 5 items nets you no profit whatsoever. Why? Because you've merely regained the initial cost for the 10 products. This highlights the critical importance of optimising clearance sales for seasonal merchandise. It's not only ethically sound but also commercially wise to ensure every item purchased is sold. Take, for instance, our customer FAM Brands. They saw a 10% increase in EBIT through leveraging our AI-driven markdown and clearance optimisation strategies. That's the power of seasonal maths. Minimise waste and enhance profitability simply by ensuring every item finds a buyer. Here is the full version of the case study. https://lnkd.in/di7zrZ-3 #ecommerce #shopify #clearance #markdown #pricing #pricingoptimization

https://lnkd.in/ewtgYWpE After leaving the B2B sector, Birkenstock embarked on a new path by introducing their exclusive stores and prioritizing their online retail channel, ultimately catapulting the company into the stock market. How successful has Birkenstock been since undergoing this transformation?