SEMA eNews Vol. 14, No. 15, April 14, 2011

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

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

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.

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