Reverse logistics in the fashion retail industry
Howard Rosenberg, CEO and co-founder of B-Stock Solutions, discusses.
By Howard Rosenberg
27 February 2017
For UK retailers, the 2016 holiday period was a let-down to say the least: overall sales volumes for December dropped 2 per cent while some of the largest high street retail giants including Next, Debenhams, M&S and Primark reported lower-than-expected-profits. On top of this, January brought with it an influx of returns: relaxed customer return policies, the shift to online spending (which brings much higher return rates) and increased buyer’s remorse lead UK consumes to bring or send back one in three purchases. This trend, and the growing cost associated with it, creates a new urgency for retailers to rethink their reverse logistics processes. This includes what happens to the merchandise that cannot be returned to virtual shelves and is slated for liquidation.
Having proper liquidation solution in place, especially one that recoups top dollar for the merchandise, is crucial. If you’ve historically sold your inventory to one or two brokers your recovery value will remain low because brokers are experts at negotiating prices down in order to maximize their own profits. What’s more, time spent negotiating deals for every lot of merchandise you have to sell, takes you away from core, strategic activities.
A better solution is to leverage a web-based platform, making it possible to have thousands of buyers compete for your inventory, pushing prices up versus a single buyer negotiating them down. This could include launching an online liquidation marketplace that can be customized, integrated and scaled based on your unique inventory needs or leveraging an established business-to-business online auction marketplace that caters directly to thousands of liquidation buyers. Some of the world’s largest apparel retailers and e-tailers are using this type of automated, technology-driven sales process to increase recovery by 30 per cent + while generating a faster sales cycle and proprietary market intelligence in the form of real data on market prices.
Consumer behaviour is fickle and retailers must accommodate for a rise in return and in some cases, excess inventory woes. An efficient, cost-effective, recovery-generating liquidation process is a must in today’s competitive retail landscape and can mean the difference between winning and losing.
Howard Rosenberg is CEO and co-founder of B-Stock Solutions, a technology company powering the largest network of private-label B2B liquidation marketplaces. Hundreds of retailers, including seven of the top 10 U.S. retailers, have leveraged B-Stock Solutions’ technology and service offerings to sell billions of dollars in consumer returned and excess inventory. For more information please visit http://bstock.com.
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