According to Accenture, 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."
NEW YORK – As the holiday season approaches, I find myself sweat with dread over the upcoming big family Christmas party.
Don’t take me wrong. I love a big get-together. I even love my in-laws and stepbrothers, sisters and their families.
However, what I dread is Christmas presents with on and off switch buttons. You’d think I am used to them, being editor of EE Times and all. But, you see, there’s the rub. That’s exactly what all of my in-laws think.
Someone opens a present, looks at it and murmurs, “That’s very nice, but how does this work?” And they look at me, the Technology Queen.
Well, I know just about as much as the next guy, but I can’t explain that to all these admirers. So, I roll up my sleeves, read the manual, tinker for a while. And if I am lucky, I can get it to work at least as long as it takes to make my getaway.
I’m no engineering genius, but I’ve been known to be very stubborn. I don’t give up easily. If it takes me days — and sometimes, to my husband’s chagrin, it has! — I’m gonna make this sucker work.
Plus, I’ve got my EE Times cred to protect! I can’t just announce to the family: “C’mon, gimme a break, people. I majored in sociolinguistics.”
Which brings me to my point: The electronics industry began talking about the importance of the “out-of-the-box experience” almost a decade ago. The fact that we are still talking about it today demonstrates how truly hard it is to get people from the opening of the box to the operation of the gadget.
Why do you think so many kids end up playing with the box instead of the toy?
My most recent aha! moment came from a press release on report issued by Accenture.
According to Accenture, 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. Over the past five years, product returns in the consumer electronics industry are growing twice as fast as the industry’s revenues, said the firm.
Of those returned products, the report also revealed, “While 27 percent reflect ‘buyer’s remorse,’ 68 percent of returned products ultimately are characterized as ‘No Trouble Found.’’’
Geez. That’s $11.56 billion — for nothing?
I requested an interview with an Accenture executive to find out what’s really going on here.
My first question to David Douthit was what sort of “consumer products” are included in this research as “returned products.” The study included everything from TV sets, PCs and smartphones to keyboards, mice and software, according to Douthit.
The report described “products returned.” Does this mean that consumers actually opened the boxes and returned them?
Douthit assured me that the study focused on returns of “opened boxes”
with seals broken, rather than people returning unopened boxes because they found a better deal on the same product elsewhere.
Alarmingly, according to Accenture, “A majority of returned products have nothing wrong with them.” As Douthit put it, “Most consumer electronics products don’t break easily. Their failure rates are relatively small.”
Well, then, why so many returns? What do we need to figure out about the state of consumer electronics design, marketing and sales?
“Our hypothesis is, ‘the device didn’t meet the customer’s expectations,’ even though the product meets a manufacturer’s specs and tests,” said Douthit. Drill down further and you get the suspicion “consumers were either misinformed or they found it too hard to install [software, etc.]”
More bluntly put, consumers, after opening the box, found that the gadget requires “a lot more than what I had expected to do,” explained Douthit.
Hearing this, I felt like telling Douthit: “Thanks! You’ve hit the nail on the head!”
“Because this is where the nail hits me. At Christmas, I often end up spending WAY more time than I had expected figuring out someone else’s presents — at a time when everyone is getting comfortable, cheery and goofy with eggnog, mulled wine and green-bean casserole.
Putting my personal troubles aside… what, if anything, can CE vendors do in the face of these massive product returns?
Accenture’s Douthil had three suggestions, and the last one is mine:
1) Invest in customer services – whether online or on physical sales floors – and highlight the education of customers.
2) Many best-in-class companies customarily do extensive customer research before they launch a new product; but it’s also a good idea to embed in the process time for a retail survey or customer survey – at least during the first 30 days after product launch. Use that time to sort out the quick fixes from the major headaches. Of course, the quick fixes should actually happen quickly.
3) Make a sincere investment in front-loading your customer services, so you can proactively prevent product returns. Proactive means calling customers (before they call you), asking them if they need help, helping them if they need help as long as they need help (just keep thinking, “$17 billion, $17 billion!”), making clear – up front –what the gadget can do if used properly.
4) And just for good measure, come along with me to the Christmas party.
You can read the overview of Accenture’s report, entitled “A Returning Problem: Reducing the Quantity and Cost of Product Returns in Consumer Electronics” here.