Okay, if you're in retail leadership, I want
you to just walk into the front of one of your
stores right now, especially after the big holiday
rush. I can pretty much guarantee what you're
seeing. It's doing a very unfortunate impersonation
of the baggage claim at JFK Airport. It's the
seasonal reality, isn't it? The headlines are
all screaming about record -breaking holiday
return numbers. They are. And when executives
see those figures, the immediate reaction, it's
almost... paralyzing. The whole organization
just shifts into triage mode. And that's the
core problem we found in the sources. You see
all the teams bracing for, you know, cost control,
getting ready for the paperwork, the mountain
of logistics. The sorting, the restocking. Right.
They're focusing purely on mitigating the damage.
They're prepping for the wrong thing, the cost,
when they should be laser focused on the opportunity.
And that's what this deep dive is really about.
It's about forcing that pivot. We want to move
the focus away from just bracing for that logistic
pain and push it toward maximizing revenue. And
loyalty. And loyalty, exactly. Right at the moment
when you feel like your margins are about to
just completely erode, our sources show there's
a really powerful, simple way to do that. So
our mission today is to really uncover the business
case that's hiding inside that massive pile of
returned merchandise. Because here's the key
insight for anyone in leadership. Every single
person standing in that returns line is a shopper
you already paid to acquire. And a huge number
of them are online first customers who are physically
setting foot in your store for the very first
time. They're in the building. On your dime,
looking for an interaction. They are. And if
you kind of zoom out and look at the whole P
&L, that customer represents a huge and usually
underutilized traffic driver. Just think about
the customer lifetime value, the CLV of that
person. You've already paid significant money
probably through digital ads, search keywords,
something, to get them to make that first purchase
online. You paid the C -COT, the customer acquisition
costs, and that is not a small number these days.
Not at all. So they've already gone through your
online funnel, they've committed to the brand,
they opened their wallet. The fact that, I don't
know, the dress didn't fit. or the sweater didn't
feel right, that's a product issue. It were a
logistics issue. Right. It's not a failure of
their interest in your brand. Yeah. And now the
return has brought this really high value digitally
acquired customer right onto your physical retail
floor. So here's the million dollar question.
This is the one that should be keeping every
executive up at night. Why are so many organizations
just processing the refund, getting them out
the door as fast as possible, and watching one
of their most expensive customers just walk right
back out. You did all the work to get them in
the building. It is such a massive missed opportunity.
And it brings us to this foundational theme we
pulled from our analysis, the huge financially
meaningful difference between clerking the return
and winning the moment. One of them is just a
pure cost center that burns resources. The other
is a genuine loyalty and revenue engine. And
that difference, it's measurable. You can see
it in average transaction value and CLV retention.
Okay, let's unpack that because this failure
scenario, the clerking the return one. Yeah.
It's just so ingrained in retail culture, isn't
it? Especially when your staff is just focused
on clearing the line. Oh, absolutely. It's what
costs retailers massive amounts of revenue, even
if the transaction itself is, you know, technically
polite and fast. We all know that robotic script
customer comes up. Hi, I'm here to return this.
And the associate, who's probably been trained
to prioritize speed above all else, replies almost
defensively. Was it a gift? Got the receipt.
OK, here's your refund. You're all set. That's
it. It's clean. It's fast. On paper, that sounds
efficient, right? Right. But it is completely
and utterly forgettable. Zero conversation. Zero
attempt to understand why the item didn't work
for them. And definitely no attempt to show them
a solution that's probably sitting like five
feet away on a rack. And that interaction just
signals to the customer that your brand is purely
transactional. Clerking is easy. It's the path
of least resistance. But it guarantees that customer
walks out with a neutral impression. at best.
Which means they probably won't come back. Exactly.
Why would they? The experience wasn't helpful
or engaging. OK, hold on. Let me just challenge
that for a second, because I know what the operations
teams are thinking right now. It's January. It's
chaos. You have lines out the door. Isn't efficiency
the most important thing? That's the classic
trade -off. I mean, if we tell associates to
slow down to engage every single person, won't
that cost more in labor, create huge lines, and
just tank our customer satisfaction scores? Isn't
speed king? It's the classic executive dilemma.
and is where that short -term cost control brain
clashes with long -term loyalty building. But
the sources suggest this isn't about slowing
every transaction down. It's about making a high
value selection. Most returns are pretty low
value. But that digitally acquired first time
in -store customer, that's a high value target.
You train your teams to spot and prioritize that
conversation. I see. So let's walk through the
success scenario, the strategic shift to engaging
the return. This is where that little conversational
change really transforms the outcome. OK, so
imagine the same starting point. Customer comes
in. I'm here to return this black sweater. The
trained associate acknowledges the task, but
immediately pivots to a qualifying question,
something like, no problem at all. We can get
that refund handled for you. Just out of curiosity
was this a gift or something you picked out for
yourself? That's the pivot point because the
customer might say oh, it was a gift. It's just
not really my style I like brighter colors and
now you have insight. It's not a quality problem.
It's not a sizing problem It's a taste problem.
The brand isn't being rejected. Just that specific
product choice So that's the opening that's the
opening and the trained associate follows up
with a specific solution oriented suggestion
Not a generic pitch. Something like, I totally
get that. If you're up for it, we just got a
new collection in right over there with these
amazing knits in electric blue and crimson. Totally
different vibe. I want to take a look. And this
is where it becomes measurable for an executive
watching the bottom line. The customer who walked
in just to get a refund is now browsing. They're
standing in the most valuable marketing space
you own your store. We call it CRIL, the conversion
rate in the return line. I like that. C -R -I
-L. And the uplift isn't just a theory. They
might leave with that replacement sweater they
actually love. But even better, once their wallet
is metaphorically open, they might grab something
else. Earrings. A scarf. Which immediately increases
your average transaction value and offsets the
cost of the refund right then and there. Exactly.
And even if they don't buy anything that minute,
the service impression, that feeling of being
helped, not just processed, that's where loyalty
is built. Right. You've just turned a negative
touch point, a return, into a really positive,
memorable experience. And that's the long -term
ROI. That customer leaves thinking, wow, they
didn't just give me my money back, they helped
me find something better. That's what ensures
they come back, which increases their lifetime
value far more than the tiny margin loss on that
one sweater. OK. So the business case is clear.
But the sources are also clear that most associates
are still defaulting to that robotic, clerked
interaction. And for you, the executives listening,
we have to look at why that is. Because it's
not about them being lazy. It's almost never
a lack of care. It's a failure of the system
and a failure of confidence. Most store teams,
if you just leave them to it, will treat returns
as purely transactional. Why? Because it's the
fastest way to clear the line. The immediate
operational pressure. Right. They don't have
the knowledge or, more importantly, the confidence
to risk an engagement that might slow them down
or, you know, get a negative reaction. And let's
be realistic about the environment. It's January.
Retail triage. You've got tired full time staff,
tons of seasonal hires who got a crash course
in training. And just massive return volumes
creating stress for everyone. In that environment,
training on nuanced soft skills like consultative
selling. It's a first thing to go. Or it's relegated
to some two -hour PowerPoint that everyone forgets
the next day. And that is the root cause of all
this lost revenue. This training gap leads to
a systemic failure to monetize your highest intent
traffic. Executives have to see this as a failure
of operational priority. not a failure of their
people. We're losing the opportunity because
we haven't given our frontline teams the continuous
targeted support they need to just ask one follow
-up question. Which is why the sources suggest
the big win is in completely rethinking the coaching
model. This isn't about more annual seminars,
it's about getting the training to them right
at the moment of need. Just in time coaching.
Exactly. It's about building confidence, not
about pushy selling. And this is where technology
platforms can really change the game. The source
has mentioned INCITE as a great example of a
system that can deliver these short, real -world
coaching moments right to the floor. I love that
idea. So instead of trying to remember something
from a training two months ago, you can push
a quick 90 -second video to their device on the
floor. Or a short reminder post, a just -in -time
refresh designed specifically for the post -holiday
return crush. It allows leadership to be so much
more agile. It does. If you see that 70 % of
your returns are because of fit, your system
should immediately push out a micro training
on how to suggest a replacement size and cross
-sell an accessory. If it's about style, the
refresher focuses on consultative questions.
So it prepares them for the exact scenario they're
facing right now under pressure. That seems absolutely
vital for getting seasonal hires up to speed
with your core team. This is a systemic investment.
It's not a cost. When you increase your associate's
confidence and competence in these moments, you
directly impact those metrics you care about.
CRIL goes up. ATV goes up. And the retention
of that expensive digitally acquired customer
skyrockets. And the ROI on that focused training
is just massive compared to the endless cost
of acquiring a brand new customer from scratch.
So let's bring it all home. For you in executive
leadership, what does this all mean? Let's summarize
the business case. The numbers don't lie. You
already paid for the ad. You already paid for
the shipping. All the hard work of customer acquisition
is done. The money has been spent. And now that
customer is standing in your store, face -to
-face with your associate, that interaction is,
you could argue, the most valuable piece of real
estate in their entire journey with you. It's
that final moment of high -intent, in -person
connection. So the mandate is pretty clear. You
cannot afford to let them walk out empty -handed.
And you absolutely cannot afford for them to
walk out unimpressed. You have to make that return
moment count for revenue, for loyalty, for long
-term customer lifetime value. And given that
this entire transformation turning a huge cost
center into a profit engine relies on a simple
conversational shift. Well... there's a broader
implication here for your planning cycle. We've
seen how quickly a return can be transformed
with the right coaching. So this raises a strategic
question for you, the executive, as you plan
your big investments for 2026. If this subtle
tech -enabled shift in training can transform
the high -pressure returns process, what other
core seemingly transactional processes in your
business are currently being clerked instead
of sold? That's a great question. Things like
inventory lookups, click and collect handoffs,
even fitting room interactions. How many of those
are just being clerked instead of being actively
leveraged to win the moment, increase the basket
size, and really solidify that customer relationship?
It's a challenge to look at your entire business
through that lens of engagement versus transaction.