WEBVTT 00:00:00.000 --> 00:00:01.780 Okay, if you're in retail leadership, I want 00:00:01.780 --> 00:00:03.620 you to just walk into the front of one of your 00:00:03.620 --> 00:00:07.000 stores right now, especially after the big holiday 00:00:07.000 --> 00:00:09.599 rush. I can pretty much guarantee what you're 00:00:09.599 --> 00:00:13.439 seeing. It's doing a very unfortunate impersonation 00:00:13.439 --> 00:00:15.859 of the baggage claim at JFK Airport. It's the 00:00:15.859 --> 00:00:18.039 seasonal reality, isn't it? The headlines are 00:00:18.039 --> 00:00:20.359 all screaming about record -breaking holiday 00:00:20.359 --> 00:00:23.760 return numbers. They are. And when executives 00:00:23.760 --> 00:00:26.640 see those figures, the immediate reaction, it's 00:00:26.640 --> 00:00:29.699 almost... paralyzing. The whole organization 00:00:29.699 --> 00:00:32.740 just shifts into triage mode. And that's the 00:00:32.740 --> 00:00:34.619 core problem we found in the sources. You see 00:00:34.619 --> 00:00:37.479 all the teams bracing for, you know, cost control, 00:00:37.500 --> 00:00:39.880 getting ready for the paperwork, the mountain 00:00:39.880 --> 00:00:42.640 of logistics. The sorting, the restocking. Right. 00:00:42.700 --> 00:00:45.219 They're focusing purely on mitigating the damage. 00:00:45.320 --> 00:00:47.479 They're prepping for the wrong thing, the cost, 00:00:47.799 --> 00:00:50.359 when they should be laser focused on the opportunity. 00:00:50.520 --> 00:00:52.740 And that's what this deep dive is really about. 00:00:52.740 --> 00:00:54.740 It's about forcing that pivot. We want to move 00:00:54.740 --> 00:00:57.219 the focus away from just bracing for that logistic 00:00:57.159 --> 00:01:01.679 pain and push it toward maximizing revenue. And 00:01:01.679 --> 00:01:05.420 loyalty. And loyalty, exactly. Right at the moment 00:01:05.420 --> 00:01:07.599 when you feel like your margins are about to 00:01:07.599 --> 00:01:11.060 just completely erode, our sources show there's 00:01:11.060 --> 00:01:14.010 a really powerful, simple way to do that. So 00:01:14.010 --> 00:01:17.549 our mission today is to really uncover the business 00:01:17.549 --> 00:01:20.209 case that's hiding inside that massive pile of 00:01:20.209 --> 00:01:22.810 returned merchandise. Because here's the key 00:01:22.810 --> 00:01:26.269 insight for anyone in leadership. Every single 00:01:26.269 --> 00:01:29.209 person standing in that returns line is a shopper 00:01:29.209 --> 00:01:31.829 you already paid to acquire. And a huge number 00:01:31.829 --> 00:01:35.189 of them are online first customers who are physically 00:01:35.189 --> 00:01:36.950 setting foot in your store for the very first 00:01:36.950 --> 00:01:38.629 time. They're in the building. On your dime, 00:01:38.750 --> 00:01:40.870 looking for an interaction. They are. And if 00:01:40.870 --> 00:01:42.609 you kind of zoom out and look at the whole P 00:01:42.609 --> 00:01:46.549 &L, that customer represents a huge and usually 00:01:46.549 --> 00:01:48.810 underutilized traffic driver. Just think about 00:01:48.810 --> 00:01:51.810 the customer lifetime value, the CLV of that 00:01:51.810 --> 00:01:54.189 person. You've already paid significant money 00:01:54.189 --> 00:01:56.209 probably through digital ads, search keywords, 00:01:56.469 --> 00:01:58.689 something, to get them to make that first purchase 00:01:58.689 --> 00:02:01.549 online. You paid the C -COT, the customer acquisition 00:02:01.549 --> 00:02:03.569 costs, and that is not a small number these days. 00:02:03.890 --> 00:02:05.909 Not at all. So they've already gone through your 00:02:05.909 --> 00:02:07.689 online funnel, they've committed to the brand, 00:02:07.790 --> 00:02:10.370 they opened their wallet. The fact that, I don't 00:02:10.370 --> 00:02:12.400 know, the dress didn't fit. or the sweater didn't 00:02:12.400 --> 00:02:15.719 feel right, that's a product issue. It were a 00:02:15.719 --> 00:02:18.460 logistics issue. Right. It's not a failure of 00:02:18.460 --> 00:02:22.360 their interest in your brand. Yeah. And now the 00:02:22.360 --> 00:02:26.699 return has brought this really high value digitally 00:02:26.699 --> 00:02:30.319 acquired customer right onto your physical retail 00:02:30.319 --> 00:02:32.919 floor. So here's the million dollar question. 00:02:33.180 --> 00:02:34.840 This is the one that should be keeping every 00:02:34.840 --> 00:02:37.860 executive up at night. Why are so many organizations 00:02:37.860 --> 00:02:41.080 just processing the refund, getting them out 00:02:41.080 --> 00:02:43.400 the door as fast as possible, and watching one 00:02:43.400 --> 00:02:45.659 of their most expensive customers just walk right 00:02:45.659 --> 00:02:47.460 back out. You did all the work to get them in 00:02:47.460 --> 00:02:50.400 the building. It is such a massive missed opportunity. 00:02:50.479 --> 00:02:53.280 And it brings us to this foundational theme we 00:02:53.280 --> 00:02:56.819 pulled from our analysis, the huge financially 00:02:56.819 --> 00:02:59.460 meaningful difference between clerking the return 00:02:59.460 --> 00:03:02.020 and winning the moment. One of them is just a 00:03:02.020 --> 00:03:04.840 pure cost center that burns resources. The other 00:03:04.840 --> 00:03:08.080 is a genuine loyalty and revenue engine. And 00:03:08.080 --> 00:03:10.800 that difference, it's measurable. You can see 00:03:10.800 --> 00:03:13.400 it in average transaction value and CLV retention. 00:03:13.719 --> 00:03:16.639 Okay, let's unpack that because this failure 00:03:16.639 --> 00:03:19.000 scenario, the clerking the return one. Yeah. 00:03:19.180 --> 00:03:22.099 It's just so ingrained in retail culture, isn't 00:03:22.099 --> 00:03:24.240 it? Especially when your staff is just focused 00:03:24.240 --> 00:03:27.000 on clearing the line. Oh, absolutely. It's what 00:03:27.000 --> 00:03:30.259 costs retailers massive amounts of revenue, even 00:03:30.259 --> 00:03:32.719 if the transaction itself is, you know, technically 00:03:32.719 --> 00:03:35.060 polite and fast. We all know that robotic script 00:03:35.060 --> 00:03:37.539 customer comes up. Hi, I'm here to return this. 00:03:37.620 --> 00:03:39.379 And the associate, who's probably been trained 00:03:39.379 --> 00:03:42.680 to prioritize speed above all else, replies almost 00:03:42.680 --> 00:03:45.360 defensively. Was it a gift? Got the receipt. 00:03:45.620 --> 00:03:47.580 OK, here's your refund. You're all set. That's 00:03:47.580 --> 00:03:49.800 it. It's clean. It's fast. On paper, that sounds 00:03:49.800 --> 00:03:51.860 efficient, right? Right. But it is completely 00:03:51.860 --> 00:03:54.439 and utterly forgettable. Zero conversation. Zero 00:03:54.439 --> 00:03:56.520 attempt to understand why the item didn't work 00:03:56.520 --> 00:03:58.960 for them. And definitely no attempt to show them 00:03:58.960 --> 00:04:01.340 a solution that's probably sitting like five 00:04:01.340 --> 00:04:04.000 feet away on a rack. And that interaction just 00:04:04.000 --> 00:04:06.479 signals to the customer that your brand is purely 00:04:06.479 --> 00:04:09.699 transactional. Clerking is easy. It's the path 00:04:09.699 --> 00:04:12.659 of least resistance. But it guarantees that customer 00:04:12.659 --> 00:04:15.229 walks out with a neutral impression. at best. 00:04:15.469 --> 00:04:18.670 Which means they probably won't come back. Exactly. 00:04:18.769 --> 00:04:20.769 Why would they? The experience wasn't helpful 00:04:20.769 --> 00:04:23.329 or engaging. OK, hold on. Let me just challenge 00:04:23.329 --> 00:04:25.410 that for a second, because I know what the operations 00:04:25.410 --> 00:04:28.569 teams are thinking right now. It's January. It's 00:04:28.569 --> 00:04:31.810 chaos. You have lines out the door. Isn't efficiency 00:04:31.810 --> 00:04:33.990 the most important thing? That's the classic 00:04:33.990 --> 00:04:36.350 trade -off. I mean, if we tell associates to 00:04:36.350 --> 00:04:38.569 slow down to engage every single person, won't 00:04:38.569 --> 00:04:41.290 that cost more in labor, create huge lines, and 00:04:41.290 --> 00:04:44.870 just tank our customer satisfaction scores? Isn't 00:04:44.870 --> 00:04:47.310 speed king? It's the classic executive dilemma. 00:04:47.529 --> 00:04:50.410 and is where that short -term cost control brain 00:04:50.410 --> 00:04:53.069 clashes with long -term loyalty building. But 00:04:53.069 --> 00:04:54.730 the sources suggest this isn't about slowing 00:04:54.730 --> 00:04:57.170 every transaction down. It's about making a high 00:04:57.170 --> 00:04:59.769 value selection. Most returns are pretty low 00:04:59.769 --> 00:05:03.230 value. But that digitally acquired first time 00:05:03.230 --> 00:05:06.310 in -store customer, that's a high value target. 00:05:06.649 --> 00:05:10.230 You train your teams to spot and prioritize that 00:05:10.230 --> 00:05:12.769 conversation. I see. So let's walk through the 00:05:12.769 --> 00:05:16.550 success scenario, the strategic shift to engaging 00:05:16.550 --> 00:05:19.790 the return. This is where that little conversational 00:05:19.790 --> 00:05:22.949 change really transforms the outcome. OK, so 00:05:22.949 --> 00:05:25.230 imagine the same starting point. Customer comes 00:05:25.230 --> 00:05:28.790 in. I'm here to return this black sweater. The 00:05:28.790 --> 00:05:31.250 trained associate acknowledges the task, but 00:05:31.250 --> 00:05:33.430 immediately pivots to a qualifying question, 00:05:33.529 --> 00:05:36.370 something like, no problem at all. We can get 00:05:36.370 --> 00:05:39.060 that refund handled for you. Just out of curiosity 00:05:39.060 --> 00:05:41.259 was this a gift or something you picked out for 00:05:41.259 --> 00:05:43.959 yourself? That's the pivot point because the 00:05:43.959 --> 00:05:45.819 customer might say oh, it was a gift. It's just 00:05:45.819 --> 00:05:48.180 not really my style I like brighter colors and 00:05:48.180 --> 00:05:50.860 now you have insight. It's not a quality problem. 00:05:50.879 --> 00:05:53.240 It's not a sizing problem It's a taste problem. 00:05:53.560 --> 00:05:56.920 The brand isn't being rejected. Just that specific 00:05:56.920 --> 00:05:59.199 product choice So that's the opening that's the 00:05:59.199 --> 00:06:01.759 opening and the trained associate follows up 00:06:01.759 --> 00:06:05.379 with a specific solution oriented suggestion 00:06:05.579 --> 00:06:08.220 Not a generic pitch. Something like, I totally 00:06:08.220 --> 00:06:10.019 get that. If you're up for it, we just got a 00:06:10.019 --> 00:06:11.800 new collection in right over there with these 00:06:11.800 --> 00:06:14.879 amazing knits in electric blue and crimson. Totally 00:06:14.879 --> 00:06:16.720 different vibe. I want to take a look. And this 00:06:16.720 --> 00:06:18.699 is where it becomes measurable for an executive 00:06:18.699 --> 00:06:21.279 watching the bottom line. The customer who walked 00:06:21.279 --> 00:06:24.660 in just to get a refund is now browsing. They're 00:06:24.660 --> 00:06:26.899 standing in the most valuable marketing space 00:06:26.899 --> 00:06:30.920 you own your store. We call it CRIL, the conversion 00:06:30.920 --> 00:06:34.350 rate in the return line. I like that. C -R -I 00:06:34.350 --> 00:06:36.430 -L. And the uplift isn't just a theory. They 00:06:36.430 --> 00:06:38.569 might leave with that replacement sweater they 00:06:38.569 --> 00:06:41.250 actually love. But even better, once their wallet 00:06:41.250 --> 00:06:43.370 is metaphorically open, they might grab something 00:06:43.370 --> 00:06:46.649 else. Earrings. A scarf. Which immediately increases 00:06:46.649 --> 00:06:49.050 your average transaction value and offsets the 00:06:49.050 --> 00:06:51.149 cost of the refund right then and there. Exactly. 00:06:51.569 --> 00:06:53.470 And even if they don't buy anything that minute, 00:06:54.209 --> 00:06:56.129 the service impression, that feeling of being 00:06:56.129 --> 00:06:59.089 helped, not just processed, that's where loyalty 00:06:59.089 --> 00:07:01.649 is built. Right. You've just turned a negative 00:07:01.649 --> 00:07:04.870 touch point, a return, into a really positive, 00:07:05.230 --> 00:07:07.550 memorable experience. And that's the long -term 00:07:07.550 --> 00:07:10.430 ROI. That customer leaves thinking, wow, they 00:07:10.430 --> 00:07:11.889 didn't just give me my money back, they helped 00:07:11.889 --> 00:07:14.290 me find something better. That's what ensures 00:07:14.290 --> 00:07:17.149 they come back, which increases their lifetime 00:07:17.149 --> 00:07:20.649 value far more than the tiny margin loss on that 00:07:20.649 --> 00:07:23.209 one sweater. OK. So the business case is clear. 00:07:23.699 --> 00:07:26.420 But the sources are also clear that most associates 00:07:26.420 --> 00:07:29.360 are still defaulting to that robotic, clerked 00:07:29.360 --> 00:07:31.980 interaction. And for you, the executives listening, 00:07:32.300 --> 00:07:34.420 we have to look at why that is. Because it's 00:07:34.420 --> 00:07:36.819 not about them being lazy. It's almost never 00:07:36.819 --> 00:07:39.079 a lack of care. It's a failure of the system 00:07:39.079 --> 00:07:42.819 and a failure of confidence. Most store teams, 00:07:43.100 --> 00:07:45.399 if you just leave them to it, will treat returns 00:07:45.399 --> 00:07:48.579 as purely transactional. Why? Because it's the 00:07:48.579 --> 00:07:50.459 fastest way to clear the line. The immediate 00:07:50.459 --> 00:07:52.620 operational pressure. Right. They don't have 00:07:52.620 --> 00:07:55.319 the knowledge or, more importantly, the confidence 00:07:55.319 --> 00:07:58.040 to risk an engagement that might slow them down 00:07:58.040 --> 00:08:01.120 or, you know, get a negative reaction. And let's 00:08:01.120 --> 00:08:04.360 be realistic about the environment. It's January. 00:08:05.000 --> 00:08:08.259 Retail triage. You've got tired full time staff, 00:08:08.639 --> 00:08:11.060 tons of seasonal hires who got a crash course 00:08:11.060 --> 00:08:13.439 in training. And just massive return volumes 00:08:13.439 --> 00:08:15.980 creating stress for everyone. In that environment, 00:08:16.480 --> 00:08:19.139 training on nuanced soft skills like consultative 00:08:19.139 --> 00:08:21.920 selling. It's a first thing to go. Or it's relegated 00:08:21.920 --> 00:08:24.399 to some two -hour PowerPoint that everyone forgets 00:08:24.399 --> 00:08:26.660 the next day. And that is the root cause of all 00:08:26.660 --> 00:08:29.560 this lost revenue. This training gap leads to 00:08:29.560 --> 00:08:32.120 a systemic failure to monetize your highest intent 00:08:32.120 --> 00:08:35.080 traffic. Executives have to see this as a failure 00:08:35.080 --> 00:08:38.240 of operational priority. not a failure of their 00:08:38.240 --> 00:08:40.220 people. We're losing the opportunity because 00:08:40.220 --> 00:08:42.879 we haven't given our frontline teams the continuous 00:08:42.879 --> 00:08:45.480 targeted support they need to just ask one follow 00:08:45.480 --> 00:08:47.419 -up question. Which is why the sources suggest 00:08:47.419 --> 00:08:50.240 the big win is in completely rethinking the coaching 00:08:50.240 --> 00:08:52.440 model. This isn't about more annual seminars, 00:08:52.759 --> 00:08:54.440 it's about getting the training to them right 00:08:54.440 --> 00:08:56.500 at the moment of need. Just in time coaching. 00:08:56.779 --> 00:08:59.080 Exactly. It's about building confidence, not 00:08:59.080 --> 00:09:01.440 about pushy selling. And this is where technology 00:09:01.440 --> 00:09:03.799 platforms can really change the game. The source 00:09:03.799 --> 00:09:06.419 has mentioned INCITE as a great example of a 00:09:06.419 --> 00:09:10.240 system that can deliver these short, real -world 00:09:10.240 --> 00:09:12.759 coaching moments right to the floor. I love that 00:09:12.759 --> 00:09:14.799 idea. So instead of trying to remember something 00:09:14.799 --> 00:09:17.519 from a training two months ago, you can push 00:09:17.519 --> 00:09:20.340 a quick 90 -second video to their device on the 00:09:20.340 --> 00:09:24.080 floor. Or a short reminder post, a just -in -time 00:09:24.080 --> 00:09:27.120 refresh designed specifically for the post -holiday 00:09:27.120 --> 00:09:29.740 return crush. It allows leadership to be so much 00:09:29.740 --> 00:09:33.019 more agile. It does. If you see that 70 % of 00:09:33.019 --> 00:09:35.200 your returns are because of fit, your system 00:09:35.200 --> 00:09:37.179 should immediately push out a micro training 00:09:37.179 --> 00:09:40.120 on how to suggest a replacement size and cross 00:09:40.120 --> 00:09:43.149 -sell an accessory. If it's about style, the 00:09:43.149 --> 00:09:45.070 refresher focuses on consultative questions. 00:09:45.389 --> 00:09:47.470 So it prepares them for the exact scenario they're 00:09:47.470 --> 00:09:50.250 facing right now under pressure. That seems absolutely 00:09:50.250 --> 00:09:52.429 vital for getting seasonal hires up to speed 00:09:52.429 --> 00:09:54.889 with your core team. This is a systemic investment. 00:09:55.330 --> 00:09:58.490 It's not a cost. When you increase your associate's 00:09:58.490 --> 00:10:01.490 confidence and competence in these moments, you 00:10:01.490 --> 00:10:03.809 directly impact those metrics you care about. 00:10:04.269 --> 00:10:06.899 CRIL goes up. ATV goes up. And the retention 00:10:06.899 --> 00:10:09.899 of that expensive digitally acquired customer 00:10:09.899 --> 00:10:12.899 skyrockets. And the ROI on that focused training 00:10:12.899 --> 00:10:16.659 is just massive compared to the endless cost 00:10:16.659 --> 00:10:18.580 of acquiring a brand new customer from scratch. 00:10:18.659 --> 00:10:20.940 So let's bring it all home. For you in executive 00:10:20.940 --> 00:10:23.580 leadership, what does this all mean? Let's summarize 00:10:23.580 --> 00:10:26.080 the business case. The numbers don't lie. You 00:10:26.080 --> 00:10:28.220 already paid for the ad. You already paid for 00:10:28.220 --> 00:10:31.039 the shipping. All the hard work of customer acquisition 00:10:31.039 --> 00:10:33.320 is done. The money has been spent. And now that 00:10:33.320 --> 00:10:35.559 customer is standing in your store, face -to 00:10:35.559 --> 00:10:38.139 -face with your associate, that interaction is, 00:10:38.139 --> 00:10:40.399 you could argue, the most valuable piece of real 00:10:40.399 --> 00:10:42.440 estate in their entire journey with you. It's 00:10:42.440 --> 00:10:45.299 that final moment of high -intent, in -person 00:10:45.299 --> 00:10:47.980 connection. So the mandate is pretty clear. You 00:10:47.980 --> 00:10:50.120 cannot afford to let them walk out empty -handed. 00:10:50.639 --> 00:10:52.779 And you absolutely cannot afford for them to 00:10:52.779 --> 00:10:55.360 walk out unimpressed. You have to make that return 00:10:55.360 --> 00:10:58.899 moment count for revenue, for loyalty, for long 00:10:58.899 --> 00:11:01.379 -term customer lifetime value. And given that 00:11:01.379 --> 00:11:03.860 this entire transformation turning a huge cost 00:11:03.860 --> 00:11:06.539 center into a profit engine relies on a simple 00:11:06.539 --> 00:11:09.340 conversational shift. Well... there's a broader 00:11:09.340 --> 00:11:11.879 implication here for your planning cycle. We've 00:11:11.879 --> 00:11:13.879 seen how quickly a return can be transformed 00:11:13.879 --> 00:11:16.360 with the right coaching. So this raises a strategic 00:11:16.360 --> 00:11:18.879 question for you, the executive, as you plan 00:11:18.879 --> 00:11:22.340 your big investments for 2026. If this subtle 00:11:22.340 --> 00:11:25.000 tech -enabled shift in training can transform 00:11:25.000 --> 00:11:28.419 the high -pressure returns process, what other 00:11:28.419 --> 00:11:31.779 core seemingly transactional processes in your 00:11:31.779 --> 00:11:33.740 business are currently being clerked instead 00:11:33.740 --> 00:11:35.879 of sold? That's a great question. Things like 00:11:35.879 --> 00:11:38.360 inventory lookups, click and collect handoffs, 00:11:38.779 --> 00:11:41.019 even fitting room interactions. How many of those 00:11:41.019 --> 00:11:42.940 are just being clerked instead of being actively 00:11:42.940 --> 00:11:45.139 leveraged to win the moment, increase the basket 00:11:45.139 --> 00:11:47.580 size, and really solidify that customer relationship? 00:11:48.159 --> 00:11:49.879 It's a challenge to look at your entire business 00:11:49.879 --> 00:11:52.559 through that lens of engagement versus transaction.