The United States consumer electronics industry is battling a behemoth, escalating and unsustainable problem: product returns.
The problem is not new. It has existed as long as there has been a consumer electronics industry. But in recent years customers’ expectations have risen, products are increasingly more complex, and efforts to stop the wave of resulting returns have not kept pace. For companies to achieve high performance, this severe problem needs to be comprehensively addressed. Transformative systemic changes are needed now.
Accenture arrived at this conclusion based on new research revealing that customers returning electronics products will cost U.S. consumer electronics retailers and manufacturers nearly $17 billion this year, an increase of 21 percent since 2007. These costs include receiving, assessing, repairing, reboxing, restocking and reselling returned products. The report, “A Returning Problem: Reducing the Quantity and Cost of Product Returns in Consumer Electronics,” captures key findings and insights based on the survey.
The research is based in part on a survey of executives from communications carriers, consumer electronics retailers and consumer electronics manufacturers. Our survey revealed that product return rates over the past three to five years have increased for more than half of retailers (57 percent) and nearly half (43 percent) of manufacturers surveyed. Only 13 percent of the retailers and 12 percent of the manufacturers surveyed indicated that return rates are trending downward.
However, the Accenture research also revealed a significant opportunity for the industry to cut costs and reduce the level of product returns, given that only 5 percent of returns are related to actual product defects. While 27 percent reflect “buyer’s remorse,” 68 percent of returned products are characterized as “No Trouble Found.” This means that, despite the customer perceiving a fault, no failure was detected when retailers and manufacturers tested against their specifications. When a customer returns a device to the retailer because the device did not meet their functional or usability expectations, it’s a double tragedy: the customer turns unhappy with the experience and the retailer and manufacturer lose money.
But why hasn’t the problem been addressed? For three primary reasons: First, returns are often thought of as a cost of doing business. Second, companies focus on efficiently handling returns rather than preventing them. And third, companies often adopt a one-size-fits-all approach towards returns.
Keep in mind that "no trouble found" means that it meets the manufacturers low cost design test requirements but does not mean that it does what the user expects. If a camera is designed with low cost optics and the test expects blurry pictures...no trouble found.
Here's an example:
The board room sets unrealistic cost targets.
Engineering designs a product with the lowest possible cost and defines a test that it can pass.
The marketing department sets up the customer's expectations much higher than reality warrants.
Manfuacturing spends as little as possible (Except they seem to spend a bunch of money on the industrial grade blister pack).
Sales people have no knowledge and you can't open the package so you can't evaluate it before you purchase.
You buy the thing and cut your fingers trying to open it only to find that it is a low cost junk so you return it.
The board room is suprised at the returns. Hah!
I am very surprised at how low the number of returns are due to defects. I have had so many problems with new products in the last 5 years that I literally prepare myself to return something at least once. Don't get me started on the issues I have had with plasma and LCD TVs. I think the "No trouble found" count is just the company/store inflating numbers. If I buy a Panasonic plasma TV and there is the pink-tint/green blob issue, the store and Panasonic will tell you that is normal. I absolutely do not believe it is normal that the edges of the screen are more pink than the center, and that the center is more green than the edges.
I also find it unacceptable that some LCD/plasma TV makers say that a certain number of burnt pixels is normal. I had a laptop with a few burnt pixels that drove me crazy. Thankfully Gateway replaced the screen even though the number was below their acceptable limit, but still. A burnt pixel is a defect...regardless if there is a million or more.
I had bought a new microwave recently and the power supply was so loud you could hear it 20 feet away. The Best Buy rep said it's normal to hear a buzzing power supply until we plugged it in the store. I bet they just repackaged it and put it back on the shelf.
I could go on and on about how low quality many things are today. I really don't believe the low number of returns due to defects. It has to be larger than that.
I also have never ever returned a product because of buyers remorse. Honestly, I don't even understand that concept. If I buy something it is because I researched it and know that I want/need it. Period. Maybe if consumers are more informed that ridiculous return issue would disappear.
I would love to return a particular electronic product I bought recently, because I feel the advertising and promotion misled me - to the extend of fraud - about the fitness for a particular purpose. But it works great for its other purposes, so I'm just dissatisfied with the company.
How many products are deliberately designed to antagonize the customer?
My Samsung BluRay player forces me to waste over 2 1/2 minutes getting to the beginning of a BluRay movie trying to get through the many arbitrary "not allowed" functions of jumping directly to the main menu and skipping through the notices and previews.
In comparison, my portable DVD player allows me to go directly to the main menu and start the movie - just like that! I guess battery life is important to the design engineer, but they feel free to fritter away the user's time.
In this day of GHz processors, just how hard can they make it to go to the beginning of a file?
THE CUSTOMER IS ALWAYS RIGHT!
How many returns are as a result of a manual written in undecipherable English?
How many times have you had to deal with the store's "technical" personnel who didn't have a clue as to what you were talking about?
How many times have you had to deal with the firmware of a device written by someone, if he worked for you, you would have fired on the spot?
How many engineers let the product out the door because it "seems to work", without the rigorous testing to make it bulletproof?
And sad to say, and it's hard to admit, how many designs can only be blamed on bad engineering?
I think you are letting your xenophobia cloud your judgment.
The article states that over 90% of product returns have nothing to do with defects. Instead it is mainly due to customers not understanding the products correctly.
That product would be equally impenetrable regardless of where it was manufactured.
You have to be careful here and consider who Accenture are. They are a consultancy firm who are trying to create a market for themselves to consult on. Scare tactics. On the whole electronics systems are very very reliable. Consumer is a soft target.
Today's electronic SUCK! My wife keeps buying these expensive (over $400)digital cameras - only for them to fail in about 6 months to a year. I am tired of it. And I hate it that even the company I work for (an electronic company) justifies it by saying that they "don't want to overdesign". Gosh darn it! Please over design! At least some models - in that way I can buy the good stuff and avoid the junk. Thank you very much for whoever is listening out there.
As far as reselling refurbished units, I've been the unlucky purchaser of some of these products and can tell you that whoever does the testing or refurbishment is severely lacking in skills because MOST have been partially or totally non-functional.
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