As mentioned in the WSJ article, The War on Returns, the U.S. electronics industry spent $13.8 billion to re-box, restock, and resell returned products in 2007. Only 5% of returns were due to defective products. The remaining 95% of products returned were due to reasons such as buyer’s remorse or not understanding how the product worked. With the economy slowing down, retailers and manufacturers are paying closer attention to decrease customer returns.

How are retailers decreasing returns?

Simple Instruction Booklets: Rather than providing lengthy information packets, manufacturers are offering simpler guides which help consumers get up and running faster with less hassle and confusion.

Personalize Products: Manufacturers such as Sony offer engraving services which makes it harder for consumers to bring back the product.

Extra Service: Retailers such as Best Buy’s Geek Squad offer in-home technical service. Rather than customers returning a product due to installation frustration, they can utilize a service such as Geek Squad.

Returns & Customer Lifetime Value

Studies show that a quarter of people who return an item do not buy that same brand again. Moreover, 14% of such people will unlikely buy from the retailer again. With the current economic state, manufacturers & retailers need to pay closer attention to returns as reducing product returns will help improve the bottom line; however, studies show that returns do impact future sales as well. Reducing return rates now can have long term positive effects as well.

When was the last time you had a negative experience with someone who was servicing you? How were you feeling at the moment? Did you make a vow never to return there again? On other hand, when was the last time you had a positive experience with an employee? The connection between employee attitude and customer satisfaction is very important. If employees mistreat customers, then customers might not return. However, if customers have positive, memorable experiences, then customers will keep coming back. They might even recommend your store to their friends. It all starts with the employee.

BlueShirtNation.com

So, what exactly is BlueShirtNation.com? BlueShirt Nation, which is named for the polo shirts worn by store staff, is the employee social network of Best Buy. Best Buy executives first introduced the social network because they wanted to tap into their store employees for marketing ideas. Instead, they have seen higher participation in Best Buy’s 401(k) plan, lower employee turnover, and even photos of staffers’ pets.

Employee turnover at retail stores can reach double digits; however, employees utilizing BlueShirtNation.com are likely to stick with the company. The employee turnover for BluShirtNation.com users is slightly more than 8 percent.

It is Sunday May 27th (Memorial Day Weekend) 9:40pm in New York City, and I need more memory for my iMac. Should I:

a) Order 2×512MB chips on-line
b) Wait until the next morning to drop off at Comp USA (and pick up a few days later)
c) Go to the Apple Store on 5th Avenue
d) Procrastinate for another 4 months

If you picked “C”, you are correct. And not only is it amazing that this (and others) are open 24 hours a day, but when I got there, 150 people were touring, playing and… YES… buying (the most important take-away).
Within 15 minutes, I had my “new and improved” computer. They were only too happy to help. Why is Apple one of the few companies who really get it?

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