In light of COVID-19, the retail industry is facing a period of heightened uncertainty. Retailers are striving to optimize the customer experience at a time when discretionary spending is limited for many consumers. But, retailers must also consider the challenges associated with returns and the returns experience. Consumer electronics retailers in particular face a specific set of challenges and opportunities with maximizing the value of returned goods. In this piece, Larisa Summers, SVP of Marketing at Optoro, the leader in returns technology, offers advice on how consumer electronics retailers can respond to the new normal of retail returns.

Retailers face unprecedented challenges during the COVID-19 crisis. Supply chains are disrupted, brick-and-mortar stores are shuttered, spending is down, and consumer behavior is changing. Right now, most retailers are laser-focused on the ecommerce experience and forward logistics—but returns challenges are looming on the horizon. 

Every year, retailers brace for a returns spike following holiday shopping. This past season, we estimated that nearly $100B of goods were returned between Thanksgiving and the end of January. In response to COVID-19, retailers must anticipate yet another wave of returns along with an added layer of complexity, particularly in consumer electronics.

According to Accenture, consumer electronics typically have a return rate that ranges from 11 to 20 percent, one of the highest of all retail categories. During COVID-19, retailers should be aware of three key consumer behaviors that will impact returns management:

1. Consumers are shopping more online and buying more home entertainment electronics during the isolation period. This has a two-fold effect: ecommerce has three times the return rate of physical retail, and once stay-at-home orders are relaxed, consumers might be inclined to send “quarantine purchases” back. 
2. People are re-evaluating non-essential shopping, particularly on high price-point or luxury items like flat screen TVs, stereo systems, or high-end headphones. Consumer electronics retailers may see an uptick in returns as shoppers re-evaluate discretionary spending, and prioritize categories like groceries and household essentials. 
3. Consumers are more likely to shop secondhand or hunt for discounts during this strained economic period. Returned and open-box goods have tremendous resale potential if managed correctly.

In preparation for these shifts, consumer electronics retailers should look to the returns experience and recommerce as ways to earn loyalty, manage costs, and maximize the value of returns.

Prioritize Returns as Part of the Customer Experience

Shopping habits are quickly evolving alongside social distancing and stay-at-home mandates. Retailers have already begun responding to these shifts by offering discounts and shopping experiences like Best Buy’s curbside pickups. In an effort to drum up sales in a challenging economy, retailers are scrappily vying for customer attention.

But that shouldn’t stop at checkout. Even when consumers send goods back, retailers should consider the returns experience an opportunity to earn loyalty. According to our research, 97% of shoppers said they would continue to shop at a retailer or brand if they had a positive returns experience. Amazon, Apple, Best Buy and other tech retailers have already announced extended, more flexible return policies in an attempt to build goodwill with customers. 

Maximize Recommerce in the New Normal

Most high-value consumer electronics items have higher resale value than other product categories. Retailers have an opportunity to refurbish damaged returns for resale. But, they need to act quickly so the items don’t depreciate in value. 

Online resale channels can help move returned inventory quickly, and also appeal to shoppers who may be more budget-conscious during the pandemic. For example, Walmart and Best Buy both sell open-box and returned inventory directly on their ecommerce sites. Retailers can also tap third-party resale channels like eBay and BLINQ to offload inventory and meet consumer demand for discounted or secondhand goods. EBay has seen triple digit growth in search queries across various categories over the past month, and BLINQ has seen a 30% increase in pageviews on laptops, tablets, desktops and monitors since mid-March.  Retailers who invest in optimizing resale channels under pressure now will see benefits in the long-term. Activating a strong secondary marketplace strategy can increase recovery by huge margins, and also help keep electronics out of landfills. 

Consumer electronics retailers are in a catch-22. On the one hand, people are stuck at home and looking for in-home entertainment options. But, on the other, they’re cutting back on spending, and might not be looking to upgrade their TVs. As a result, consumer electronics retailers face more uncertainty than most other retail categories. In response, retailers should shore up their reverse supply chain and ensure they have the best customer experience, vendor management, and recommerce systems in place to manage a potential surge in returns. 

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Larisa Summers
Larisa Summers is SVP of Marketing at Optoro, the leader in returns technology. Larisa is a seasoned retail executive who has worked with both venture-funded startups as well as Fortune 500 companies, including industry pioneers Buy.com and Zumba Fitness. She also previously led Best Buy’s  Secondary Markets online businesses.In light of COVID-19, the retail industry is facing a period of heightened uncertainty. Retailers are striving to optimize the customer experience at a time when discretionary spending is limited for many consumers. But, retailers must also consider the challenges associated with returns and the returns experience. Consumer electronics retailers in particular face a specific set of challenges and opportunities with maximizing the value of returned goods. In this piece, Larisa Summers, SVP of Marketing at Optoro, the leader in returns technology, offers advice on how consumer electronics retailers can respond to the new normal of retail returns.