Consumer Returns Conference 2008 Presentation
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Consumer Returns Conference 2008 Presentation

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Consumer Returns Conference 2008 Presentation Consumer Returns Conference 2008 Presentation Presentation Transcript

  • Consumer Returns 2008 Creating and Implementing an effective disposition strategy to reduce the costs associated with Reverse Logistics and enhance asset recovery Ric Spicer, Manager Reverse Logistics and Recycling Wednesday, October 29, 2008
  • Discussion Topics
    • Scope of Consumer Electronics Returns
    • Reverse Logistics @ Circuit City
    • Creating a disposition system to determine whether a product is:
      • Returned to Vendor
      • Refurbished and resold in the store
      • Remarketed through alternative channels
      • Recycled
    • Building awareness of vendor master agreements into your disposition systems, to ensure all valid items are returned to vendor
    • Configuring your diagnostics and disposition systems to deal with outstanding product and brand variety
  • Scope of Consumer Electronics Returns
    • $11.0 Billion in CE Product returns and Exchanges in 2008
      • 25% result in cash reimbursement, credit card reimbursement or store credit
      • 39% made a similar purchase at a different store
      • Cost to Industry: $1.4 Billion
  • Scope of Consumer Electronics Returns
    • Two year rate of returns continues to decline
      • 27% in 2004-05, 23% in 2007-08
    • Overall return rate for the past 12 months is 27% (including Accessories)
    • Loyalty to brands or retailers not adversely affected by product returns
  • Scope of Consumer Electronics Returns
    • Top 3 Reasons for Returns:
      • Did not work as thought: 34%
      • It broke while I was using it: 31%
      • It did not work out of the box: 24%
    • Least cited reasons for returns:
      • Found a better deal: 6%
      • No longer wanted: 10%
  • Scope of Consumer Electronics Returns
    • When making their return:
      • 69% of consumers received an exchange
      • 42% got the same brand and model
      • 14% got the same brand but a different model
      • 13% got a different brand and different model
      • 14% got a refund
      • 3% took a store credit
  • Scope of Consumer Electronics Returns
    • In order to reduce returns, Guests would like to see:
      • Better in-store displays (21%)
      • Receive better information from the Sales Associate
  • Reverse Logistics @ Circuit City: Guest & Vendor Service
    • Begins when our Guest enters the store with a return…
    • …ends with reconciliation between Vendor and Merchandise Payables
    • And EVERYTHING in between!
  • Reverse Logistics @ Circuit City: Scope
    • Management of:
      • Return to Vendor/Risk Recall/Liquidation Physical & Electronic locations
      • Distressed Inventory
      • AS/400 Product Disposition Information
      • Returns Management Reporting
      • Consumer Electronics Recycling
      • Rechargeable Battery and Cell Phone Recycling
  • Reverse Logistics @ Circuit City: Cross Functionality
    • Vendor Relations
    • Merchandise Payables
    • Logistics
    • Distribution
    • Inventory Accounting
    • Inventory Management
    • Executive
    • FP&A
    • Home Delivery
    • Advertising
    • IT
    • Store Directors
    • guest Service Associates
    • Product Flow Team
    • Operations Managers
    • Internal Audit
    • DMG
    • Merchandising
    • Store Operations
    • Firedog
    • Asset Protection
    • Business Development
    • CC Direct
    • Corporate Communications
    • Service
    • The City
    • The Source
    • Training
    • RVPs/ROMs/DOMs
  • Creating a disposition system to determine whether a product is:
    • Return to Vendor
      • Within your Returns Policy Guidelines?
        • 14 or 30 days
      • Within Vendor Agreement Guidelines?
        • Received from vendor within 6, 12, 18 months?
      • Damaged upon Delivery?
        • Open the box in front of the guest?
      • Abused Product?
        • Obvious visible damage at point of return
      • Missing parts?
      • Reason for return?
        • Why is it always “not working” or “broken”?
  • Creating a disposition system to determine whether a product is:
    • Refurbished and resold in the store
      • Engage guest at time of return
        • Is guest Service Associate or Technician responsible?
      • Inspect product after return
        • Training is critical
        • SOPs help create consistency
        • Eliminate costs of transportation and handling at Product Return Centers
        • Product available for sale…
      • Unopened product
        • Return to shelf immediately
  • Creating a disposition system to determine whether a product is:
    • Remarketed through alternative channels
      • Open market web sales
      • Contracted third party vendors
        • Bulk sales of mixed products
        • Eaches sales eBay style
        • Selected large quantities of single SKUs
          • Contract through limited buying groups capable of quick and reliable funding
  • Creating a disposition system to determine whether a product is:
    • Recycled
      • Handled in parallel to Consumer Returns
      • Challenges:
        • Guest services
        • Warehousing & Logistics
        • Transportation
        • Consolidation
        • Responsible Reuse/Recycling/Destruction
  • Building awareness of vendor master agreements into your disposition systems, to ensure all valid items are returned to vendor
    • Product Receipt
    • – Induction of inventory at Distribution Center
      • Where is it?
      • How Much do we have?
      • When did we last receive it?
        • Starts Returns Timeclock
        • SiRas implementation
    • Guest Purchase
      • Capture information at Point of Sale
    • Guest Return
      • Capture information at the Point of Return
        • Condition of product
        • Eligible for return? Replacement? Service? Warranty?
        • Accessories included? Charges for missing accessories?
  • Building awareness of vendor master agreements into your disposition systems, to ensure all valid items are returned to vendor
    • Returns Destination
    • – Maintenance of the RTV system in the AS/400. These screens feed to all POS systems and provides Store Associates with disposition for Guest returns – Return to Vendor (RTV), Service or Liquidation.
    • Return Authorization Management
    • – Request and follow up on aging RA requests on behalf of the PRC’s to ensure returns move as quickly as possible.
    • Vendor Receipt Discrepancy Management
      • In-Transit Damages
      • Over/Short
      • Pricing Discrepancy
      • Eligibility discrepancy
  • Configuring your diagnostics and disposition systems to deal with outstanding product and brand variety
    • Centralized Management
      • Vendor relations management
      • Data management
        • Data Management Group
        • Reverse Logistics
    • Cross Functional communication
      • Changes communicated to Reverse Logistics for update
  • Configuring your diagnostics and disposition systems to deal with outstanding product and brand variety
    • Web/Direct Purchases
      • Can be returned to Circuit City stores
      • Not available for Open Box sale
      • Process through normal Reverse Logistics channels
  • Consumer Returns 2008 Creating and Implementing an effective disposition strategy to reduce the costs associated with Reverse Logistics and enhance asset recovery Questions??