It’s no secret that more and more of us are spending our hard-earned pennies online; according to the Office of National Statistics, the UK spent £137.38 billion online in the past year, accounting for 16% of all retail sales. Wondering if that’s on the rise? It’s almost doubled since 2012 and shows no signs of abating!
Higher return rates
While we’ve all started heading to our favourite websites to buy clothes, presents and everything else under the sun, this has led to something of a conundrum for the retail industry.
That is of course, return rates.
At least 30% of all products purchased online are returned, compared to 8.89% in bricks and mortar stores. That’s a staggering three times the amount and the smoothness and ease with which returns are handled is even said to have a big impact on whether or not that customer is likely to return; 92% of customers will come back if they find the process to return easy, whilst 79% of consumers want free return shipping.
But what does that mean for you as a retailer and how can stocktaking help?
Where does stocktaking fit into all of this?
Stocktaking is all about knowing what you’ve got at any given time. Once you know, you can ensure that you’re not carrying too much stock (tying up unnecessary working capital) and that you’re not left at the other end without stock (which can of course lead to lost sales and revenue).
If you have a return rate of 30%, this means that a third of your sold stock could be making its way back to you. This can cause a complexity in proceedings; if you’ve sold something and it stays sold then you’re one unit down, you know it’s down and that’s the end of the story. Simple.
If on the other hand three in ten items are sold, but then returned, you have periods where this stock is out of your inventory but returning within the stated returns period. This leaves a period during which others might want it, but you don’t want to overstock, potentially leaving you at the other end of the spectrum with a missed sales opportunity.
As we’ve said, stocktaking is all about knowing what you’ve got at a given time. Never has that been more important in a world of escalating return rates. It should also never be seen as a one off; if you’re operating large online sales, a single digit increase in return rates across the quarter can lead to large fluctuations in the stock you’re carrying.
We’re experienced in helping online retailers manage their stock levels. For more information on how our stocktaking services can help your bottom line please give us a call on 01637 874609 and we’ll be happy to answer any questions you have.