Returns are a big issue for retailers. Consumers return more than a quarter of a trillion dollars in merchandise annually, and less than half of those goods can be resold at full price. In addition to creating problems for inventory management, retailers have to figure out how to restock the sellable goods and triage damaged ones to a string of liquidators and wholesalers.
It was uncanny. Every time I needed some obscure type of screw, switch, or hinge, the team at my hometown hardware store—Elliott’s—knew exactly what I needed and where in the store’s many aisles of fasteners to find it.
How did Amazon become the retailer of choice for a large portion of the US population? How did Walmart beat out other grocers in the late 1990s to become the leader in food retailing? How did Warby Parker make a dent in the once-untouchable Luxottica’s lucrative eyewear business? How did Sephora draw customers away from once-dominant department stores to become the go-to retailer for beauty products?
We’ve written about experiences being the latest frontier in retail: How brand activations through pop-ups like the Taco Bell hotel in Palm Springs or the Cheeto’s gourmet restaurant in New York offer memorable ways to extend the brand story; How Instagram-friendly destinations like the Museum of Ice Cream offer unique opportunities for brand partnerships; How China’s virtual showrooms bring back memories of childhood.
In the constant pursuit of increasingly unrealistic targets, the need to shift excess inventory and lack of customer understanding, retail leadership teams are too focused on quick wins such as heavy discounting to achieve short-term results, not realizing the long-term damage they are creating to their brands.
