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Multichannel service approach key to convert holiday returns to repeat business

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December 21, 2012

Barneys New York flagship store

The increase in holiday transactions made via ecommerce channels as well as the tendency for consumers to exchange unwanted holiday gifts leaves luxury marketers with the opportunity to gather information from prospects and impress them through in-person and digitally-based service in the coming weeks.

Luxury brands and retailers should take a 360-degree approach to offering returns and exchanges to show the best prospects that they can provide whenever-wherever service that is often a differentiator for the high-end shopping experience. All in all, marketers should be ready to convert those who come in with returns and gift cards into active customers through gathering information and impressing them through correspondence.

“If luxury marketers are able to provide seamless returns or exchanges for consumers, retailers still have a chance in salvaging that purchase,” said Dalia Strum, president of Dalia Inc., New York.

“The easier the return or exchange process is for the consumer, the more likely they will become a loyal consumer for the future,” she said. “That is the one aspect of shopping that should be stress-free.”

Keep calm and return on
Negative experiences in the retail environment is the No. 1 reason for customer defection, per Ken Morris, principal at Boston Retail Partners, Boston.

Therefore, luxury marketers must be ready to limit these bad experiences with enough educated staff on-hand to deal with the influx of returns and exchanges after the holidays.

However, this year digitally-based purchases and brand communications can be the key differentiators in the return process.

Brands that leverage their digital communication channels such as social media, email and SMS can provide the same level of service in-store to those affluent consumers who choose to interact with retailers via digital.

“Only if a retailer has an omni-channel conscience can it be aware of all customer touch points and have a 360-degree view of the customer,” Mr. Morris said.

There are quite a few digital channels that allow luxury marketers to keep consumers updated on the return process or follow up after the transaction.

In fact, the quicker customers are notified about their credit or replacement shipment, the more satisfied they are about their purchase, per Dalia Inc.’s Ms. Strum.

Also, inquiries from customers via social media or any other digital community should not be ignored by the brand.

“As consumers are extremely busy, they want to be able to reach retailers on the digital technologies that they are utilizing,” Ms. Strum said. “Any platform such as Facebook, Twitter, email and even in some cases text messages are applicable.”

One-time to long-time
As with all return-triggered transactions, it is crucial for luxury marketers to turn these one-time buyers into repeat customers.  

One simple way is to respect all customer demands.

Luxury marketers should divide their customer base into deciles with the top 20 percent driving 80 percent of its sales, per Boston Retail Partners’ Mr. Morris.

Then, they should realize that these top-two deciles are not static, but vary based on good and bad customer moments.

“Retailers should make a return as pleasant for the customer as a sale would be,” Mr. Morris said. “Treat return customers with the utmost respect to retain customer loyalty.”

It is inevitable that both mainstream and luxury marketers will suffer from holiday returns and nothing infuriates a customer more than long lines after the holiday, per Paula Rosenblum, managing partner at RSR, Miami.

Therefore, marketers should consider a designated location for returns and employ an adequate workforce.

Also, loss prevention is key since returns are an employee theft magnet, per Ms. Rosenblum.

One way that marketers have been easing the in-store transaction process is mobile POS.

For instance, department store Barneys New York is giving in-store shoppers a more personalized checkout experience through a partnership with Infinite Peripherals that will equip sales associates with mobile point-of-sale devices at its flagship location (see story).

Marketers can incorporate mobile POS to speed up the return process as well.

Above all, returns of items purchase via digital will likely be on the rise and marketers should be ready to handle the influx.

“Return rates from digital channels are typically higher than in-store purchases in general, so expect to see even more traffic than you used to have,” Ms. Rosenblum said.

“If your policy is buy online, return anywhere, this will happen,” she said. “Even if you make the mail-in return as convenient as possible, customers will still do what seems easiest – go to the store.”

Final Take
Tricia Carr, editorial assistant on Luxury Daily, New York

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Tricia Carr is an editorial assistant on Luxury Daily. Her beats are apparel and accessories, arts and entertainment, education, food and beverage, fragrance and personal care, government, healthcare, home furnishings, jewelry, legal/privacy and nonprofits. Reach her at tricia@napean.com.

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