With less than a week to go until Black Friday – arguably the most important day of the year for both the high street and eCommerce – we’re already seeing offers and tips for getting the best bargains starting to appear.
The temptation to take advantage of the sales and get Christmas shopping completed on the cheap is about to take hold. While there is no denying that Black Friday is an incredible opportunity for retailers as it brings high levels of sales, it’s also crucial for retailers to have measures in place to stem the negative cost implications from returns.
Black Friday offers an incredible amount of choice, which brings temptation for consumers to purchase impulsively and in great volume. Customers are encouraged to spend, spend, spend. However, what retailers sometimes forget, is that the curse of buyers’ remorse can arrive quickly and before long, unusually high level of returns are appearing back at retail premises and warehouses (sometimes even before Christmas).
Data that we at B-Stock have observed has shown that retailers with the most relaxed returns policies and extended return terms suffer most. What’s more, the emergence of the ‘try-before-you-buy’ trend for online consumers is going to create even more returns. Retailers must be prepared and ready to respond, by having the necessary action plan in place.
A recent study from Barclaycard found that 25% of retailers have experienced an increase in return rates over the past two years, while 40% of fashion brands have reported a rise in refunds. Incentives like ‘try-before-you-buy’ only encourage returns and giving customers a reason to shop impulsively adds to the problem.
Anticipating returns and having the processes in place to cope with them will often be the difference in a retailer sinking or swimming. We can’t forget that with the current state of the British high street, retailers are under more pressure than ever to perform well.
Retailers should be taking advantage of a broad range of income streams, especially around Black Friday, and this includes the secondary market.
PwC recently reported that more and more retailers are starting to implement a ‘Black Fortnight’, with many retailers already offering promotions over a week before Black Friday. The benefits of this are reducing pressure on logistics and stores and to help clear excess stock from a weak October, in terms of sales.
Another way to reduce the pressure on logistics and to help clear excess stock is using the secondary market.
A secondary market channel is a great way for retailers to offset loss on excess or returned stock that can’t go back on primary shelves, versus letting it collect dust in a warehouse. If leveraged correctly, selling into the secondary market can allow the retailer to sell the stock for a high price while protecting the brand. Across Europe there are business buyers interested in bulk quantities of clothes, furniture or appliance.
The key is knowing how to tap into that buyer base; one option is a B2B liquidation marketplace like the ones B-Stock offers.
When it comes to returned purchases, following Christmas or all year round, retailers should look to the secondary market as a viable channel to offset loss. With returns only set to increase, the onus must be on retailers to seek alternative revenue streams to avoid sinking under a deluge of unwanted, returned or even liquidated stock.
By Ben Whitaker, director of B-Stock, which allows companies to sell returned, excess, or other liquidation inventory directly to a diverse base of business buyers