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YEN Member Insights: The Importance of Managing Returns

Jeremy Loud, SEMA YEN Member of the Month, April 2011

Jeremy Loud...on the Importance of Managing Returns

Jeremy Loud, 29 Years Old
Logistics Supervisor, AutoAnything

Aftermarket retailing has evolved as customer expectations have grown. At 29 years old, Jeremy Loud talks about his experience managing logistics for online retailer AutoAnything and highlights the importance of managing returns for retailers as well as for brands.

How have you seen aftermarket retailing change with the growth of online retailers such as AutoAnything?

The biggest change I've seen has been in the buyers themselves. Not long ago, a sale of a custom part online was a tricky proposition on both the part of the seller and buyer. Online presentation, product data and customer comfort with online shopping have all made significant progress, and that naturally leads to greater consumer confidence when buying online.

Many manufacturers have seen this growth and partnered with online retailers so that their products can reach a broader market. To enable smooth online transactions, suppliers have had to modify their processes.

I've seen product fitment data grow in quality by leaps and bounds in just a few years. Well-presented fitment data helps make purchase decisions easier and limit the possibility of future returns. If your fitment notes can't be understood by customers with a minimum amount of automotive knowledge, there is probably a better way to present fitment information.

Additionally, suppliers have started to meet the demands of additional and better imagery, more detailed product feature descriptions, technical support, quicker and more accurate order processing, and better communication in general. There is still room for improvement on both sides, but it has been a joy to watch some major progression in a relatively short time.

How important is managing returns for retailers?

Returns management is vital. Not only can associated costs quickly pile up, but each return represents an opportunity to recover the experience for your customer and learn something in the process. We would all love to consider "all sales final," but it doesn't always work that way.

Good returns handling can be tied to consumer confidence, which can in turn benefit the industry as a whole. Studies show that customers are significantly happier with their experience when a recovery situation is handled well than if nothing went wrong with their order at all.

The trick is learning from those returns as much as you can. Keep track of and regularly review all your returns data to identify trends. Hard and soft costs associated with returns can pile up quickly when you consider shipping costs, customer service handling time, overhead, write-offs, repairs, lost sales based on bad word-of-mouth, phone bills, opportunity cost, and the myriad of other possible returns-related expense.

Even more impactful is the potential negative impact that returns can have on your relationships with your suppliers. To mitigate this risk, I suggest establishing clear expectations on both sides as to which types of returns are acceptable. If edge cases arise, working closely with your supplier on a case-by-case basis can help you both avoid write-off losses down the road.

How do returns impact brands? How can brands and retailers work together to minimize returns?

Brands and their retailers are intimately linked together. If one fails in the eyes of the customer, it is likely that both the brand and the retailer are on the hook in the court of customer opinion.

Regular feedback between vendors and retailers is essential to keep returns to a minimum. Communication on what returns you've received and, more importantly, why you've received them should flow in both directions. Identify common reasons for returns so that you can work towards resolving them. If a high percent of your returns are related to customers ordering the incorrect part, it is very likely that a re-presentation of your products or which vehicles they fit is in order.

How have you seen customer expectations evolve around online aftermarket shopping?

Customer expectations seem to be growing exponentially. Customers now expect quick shipping, clean presentation of products thorough order communication, and quality service in recovery situations.

We've seen our customers demand more detailed fitment and product information. People want to see images of accessories on their vehicles, audio clips of what parts sound like, installation videos, social media links and customer reviews. I see this trend continuing as high-speed Internet is adopted even more universally across the country and the rest of the world. The Internet as a buying channel has become ubiquitous, as for many people it offers a more convenient shopping experience than a conventional purchase.

Traditional channels still provide the same great in-person experience. I don't think we'll ever fully move away from the personal touch in the industry, but I am eager to see how e-commerce pushes evolution in that model.