What Happens When Technology Meets Fashion Avenue?
Every other month, a group of us apparel and retail technology experts gets together on Fashion Avenue in New York City and discuss how our industry is progressing and what new technologies are out there. During our last huddle, we focused our discussion on intelligent returns and reverse logistics, honing in on the benefits for the apparel and retail industry.
This sparked a conversation about how our industry has had a poor history on how returns are managed, and how even with technologies and systems in place, it seems to be a challenge that many companies are now willing to address.
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Everyone had different responses on how this can be addressed. “Analytics,” “automated return processes,” “optimization of inventory management,” “sustainability,” “customer satisfaction,” “returns on our (apparel and/or retail) side, or returns on the supplier side,” and many other subjects fall under the category, but pointed to a common theme.
In summary, we agreed the biggest opportunity for improvement is streamlining the merchandise return process using data analysis and intelligent systems technology that employ algorithms to improve accuracy in the process.
Let’s break down the key aspect of how intelligent returns are used in the apparel and retail industries:
Automated return process
With a core intelligent system in place, organizations have started the first step when using the return authorization processes. This process may include an automated return process, label generation and tracking as well as refund processing. By having this in place, a company can also implement an intelligent system that uses data analytics to assess return requests. By analyzing factors such as purchase history, return patterns, and product conditions, the system can determine whether a return is eligible or still needs to be reviewed. All these system automations help accelerate the process and reduce errors from manual processes, thus enhancing customer satisfaction.
Optimized inventory management
By analyzing returns data, apparel and retail companies can quickly find trends, thus making better buying and restocking decisions. This helps minimize any inventory carrying costs and maximize recovery value.
Sustainability or waste reduction
An intelligent returns system can aid in all sustainability efforts by supplying data on returned products that can be repaired, repurposed, or recycled. Companies can reduce waste, minimize transportation and packaging materials, and thus align better with apparel and retailer company’s environmental goals as a result of an optimized intelligent returns process.
Predictive analytics
By leveraging historical data, intelligent returns can employ predictive analytics to proactively address potential return issues. For example, if a particular product category consistently experiences high return rates due to sizing issues, the retailer becomes quickly aware of the problem at hand. Preventative measures can be taken by these apparel companies including enhancing the product’s technical specifications or supplying accurate sizing information to minimize returns. All these efforts are also contributing factors to any sustainability and waste reduction efforts that companies are now being mandated to do.
Customer experience
Perhaps the most important factor, the goal of intelligent returns is to provide the customer with a seamless experience during the returns process. By offering self-service options for customers, the return process becomes hassle-free and intuitive. According to Gartner, “many large brands that have succeeded in making the purchase of their items as easy as possible have also come to realize it should be so with returning the items as well.” Retailers have been offering drive-through returns and instant returns to improve the overall returns experience. Returns cost the industry billions of dollars, so by making the process smoother, there will be less stress on both companies and customers.
Intelligent returns stirred up so much conversation, we were talking for over three hours and could have gone longer if everyone didn’t have to rush to make their trains home.
Bottom line, by implementing intelligent returns processes, the apparel and retail industry can streamline the returns experience, reduce costs associated with returns, optimize inventory management, and enhance customer satisfaction.
Ana Friedlander is NA director of fashion solution and strategy at Infor, a business cloud software solutions provider based in New York City.
