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Accenture research estimates
that in 2011, US consumer
electronics (CE) manufacturers,
communication carriers and
electronics retailers will spend
an estimated $16.7 billion to
receive, assess, repair, rebox,
restock and resell returned
merchandise.1 Put another way,
manufacturers spend about 5
percent to 6 percent of revenues
to manage all aspects of a
customer return. For retailers,
returns represent approximately
2 percent to 3 percent of sales.
This would be a gargantuan
concern in any industry. But
in a sector where margins are
thin, competition is brutal and
“customer experience” is a key
differentiator, high return levels
should be seen as a problem of
unsustainable magnitude.
Fortunately, the extent of the
problem is proportionate to the
size of the opportunity. There is
great potential for manufacturers
and retailers to develop formal
programs that dramatically
reduce the number and cost of
customer returns. The two groups
also have the power to design
better, more efficient ways to
process returns. Together, these
approaches could save these
companies millions of dollars and
create formidable new sources of
competitive advantage.