business news in context, analysis with attitude

Responding to yesterday’s story about the massive numbers of returns taking place in the post-holiday season, MNB reader Tom Murphy wrote:

You are correct in two assumptions: 1) retailers have a significant financial challenge with returns and 2) what consumers experience in one aspect of their lives, they tend to want in others.

Most retailers spent the last 30 years optimizing their supply chains for first stores, recently e-commerce fulfillment and now returns.  The reverse logistics of returns are fraught with inefficiencies in policies and processes.  Look for some retailers to provide an extra kick if you return the product to their store vs. by mail.  It is a double-down benefit with lower mail costs and a chance for an exchange and a new sale…it could fund a number of discounts, exchange coupons, or even a store-wide returns party…thinking wine samples from local wineries…a win for both.  Retailers also need to figure out in-store returns…how to touch it as few times as possible and how to create value from returned products, e.g., resale, charitable donation for tax credit, etc.

If I was a grocer, I would be thinking about a related problem…how will I handle delivered or click & collect product that doesn’t meet consumer expectations…think bananas that turn black in 24 hours, wrong sized or damaged product, etc.  This leads to “virtual returns” which also have policy, process and financial implications.

Regarding Unilever’s efforts to disrupt its own business because of new competition from upstart companies, one MNB reader wrote:

This thought process by Unilever is brilliant, number one is being agile in today’s CPG business environment. The small guys are running circles around the BIG’s. Finally someone recognizes that big has NOT necessarily delivered expectations over the last 10- 12 years for manufacturers and or retailers. They have gone big at the expense of agile, relationships with customers, become risk adverse due to efficiencies , not adventures and not delivering/ providing what the customer wants.
I say good for it Unilever, be a reverse trend setter BIG to small!
You can write a case study on how this has not been good for the industry, but for a few BIG’s that have grown up in that model.

Got the following email about another subject from an MNB reader:

It may make sense to have your small local post office in the Supermarket. This would drive traffic in Supermarkets as well as give post offices free or cheap rent.
Seems like a win win to me. Supermarkets give away the space or cheap rent while driving traffic substantially while USPS reduces overhead cost dramatically.

I’ve been arguing this for years. Post offices can give up their prime real estate in many communities, and open satellite windows in supermarkets, drug stores, and even public libraries … it would make all of these entities more relevant.

By the way … the really, really smart folks at Westborn Market in Michigan, which I’ve raved about here from time to time, recently took over an old post office in Plymouth, Michigan, and turned it into one of the most interesting and compelling food stores I’ve ever seen. So the advantages can cut both ways.
KC's View: