Xmas returns = bad product discovery?

When flicking through my news feeds to find an interesting commerce fact I could dwell on this Tuesday morning, one figure popped up: 550,000. This is the number of return packets UPS had to handle last Tuesday which was 8% more than last year and marks a new record in the post-Xmas returns craze.

Granted, while this blog focuses on the European commerce scene, the figure stems from the United States. However, I’m certain that a similarly high number can also be seen when looking at the EU market, so let’s take some time and think about what this actually means. (If anybody could add some figures from the EU, please feel free to include them in the comments to this post.)

A rather obvious reason for the rise of this rate compared to last year is the fact that the volume of online sales in November and December rose as well – namely by 15% according to Reuters. Actually, in comparison this means that the return rates actually dropped, which is good news for retailers because handling returns is just an expensive pain in the arse.  Evidently, online shops are gradually getting better when it comes to product presentation, so that in effect less and less people order the wrong stuff. Better images, 360° rotation, shopping guides etc. make people order exactly the stuff they want.

Okay, so why do I keep stating the obvious for a dozen sentences now? Because I think that this fact says a lot about product discovery. In my mind, when it comes to Xmas, the shopping pattern is somewhat different compared to the rest of the year, simply because people overproportionally buy stuff for other people, right? And a high return rate at this very time of the year to me is indicative of the problem that people do not know exactly what to give to each other. And I’m not talking about Amazon wish lists or the like.

The stated numbers suggest that there’s a huge potential for platforms which support users in finding the right gift based on the addresses’ likes and dislikes. Apart from not having to leave the house and fight one’s way through highly busy physical retail stores to get the products one hopes others will like, how cool would it be to find a product based on what has been said and done on Facebook or Twitter! Flicking through a hierarchically organised product catalog just isn’t enough anymore. Call it social commerce, call it recommendation intelligence – what’s needed here is an improved way of product discovery.

So, how did you find your Xmas gifts? Which platforms did you use? And, did you have to return stuff?

2 Responses to Xmas returns = bad product discovery?

  1. Last year Amazon released the “convert all gifts from Aunt Mildred”[1] patent to mitigate the fact people overproportionally buy stuff they don’t want for other people during holidays. Before reaching such (sad) extremes, leveraging friends likes, tastes and interests available through different social network as well as collaborative filtering techniques sounds a good approach to get the right gift upfront.

    [1] http://money.cnn.com/2010/12/27/technology/amazon_bad_gift_patent/index.htm

  2. Roman says:

    Olivier, thx for the info, will have a look at this soon.

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