2014 Benchmarking Trend Report Table of Contents 2014 Benchmarking Trend Report Introduction

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2014 Benchmarking Trend Report Table of Contents 2014 Benchmarking Trend Report Introduction ...... 2 The team behind Worldwide Business Research’s (WBR) Consumer Returns conference – with Research Findings ...... 3 help from an advisory board of senior-level executives from international companies – created a About Consumer benchmarking questionairre that was distributed at the Consumer Returns conference to an audience Returns...... 12 of reverse logistics, supply chain and returns management professionals. Over 50 industry leaders from national and multinational corporations answered the survey, speaking to the state of their firms’ returns reduction strategy, optimization of their reverse supply chain, and outlook for 2014.

The goal of the survey was to understand where companies are in their reverse logistics transformation process, whether they’re on track to completing their transformation according to their plans and what new strategies they plan to implement in 2014. Results to this study allow companies to see where they stand in relation to their peers on transformation, staffing needs and organizational structure.

The roles of those answering the questionnaire ranged from Director of Returns to Senior Manager, Services & After Sales to Director of Asset Recovery, to name a few. Respondents represented companies like BJ’s Wholesale Club, Dell, The Home Depot, Verizon Wireless and more.

See how your firm compares to your peers and competitors by viewing the results and analysis throughout this report.

Consumer Returns 2013 Benchmarking Results 2 Research Findings

On a scale of 1 to 10, rate your level of awareness about the importance of 1A reverse logistics at your institutions. (1=unaware, 10=very aware) 45% of respondents reported to view 30% reverse logistic at 20% their companies' as 14% 12% 12% important to very 5% 5% important. 0% 2% 0% 1 2 3 4 5 6 7 8 9 10

unaware very aware

1B How much attention is reverse logistics given on a scale of 1 to 10? 21% of participants 21% ranked their attention 17% 17% in reverse logistics 14% 14% 8% at 10. 5% 2% 0% 2% 1 2 3 4 5 6 7 8 9 10

Poor excellent

Consumer Returns 2013 Benchmarking Results 3 2A Do you feel that return rates have increased or decreased in the last 48% of respondents 12 months? saw a decrease in return rates over the last 12 months. Increased 33%

No Change 17%

Depends 2%

Decreased 48%

2a 10 20 30 40 50

Is there a particular product class with a change in return rates? 53% of participants 2B What did you attribute this change in return rates to? said cellphones had 2b a change in return2b rates. 53% Cell Phones

29% Television

18% Other Product Class

Consumer Returns 2013 Benchmarking Results 4

31020304050

5a 10 20 30 40 50 60 70 80

5c 10 20 30 40 50 60 70 80

5c 10 20 30 40 50 60 70 80 2a 10 20 30 40 50

2b 2a 10 20 30 40 50

3 Are you seeing an increase or decrease in NTF/NFF (no trouble found/ 48% of participants no fault found) returns? did not see a change in NTF/NFF returns. Increased 28%

No Change 48%

Not Sure 3%

Decreased 21%

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Does your company focus more or less on the consumer experience than it 73% of participants 4 did 12 months ago? said company focus on consumer4 4 experience increased ove the last 12 73% Increased months. 18% Same

9% Decreased

Consumer Returns 2013 Benchmarking Results 5

5a 10 20 30 40 50 60 70 80

5b 5a 10 20 30 40 50 60 70 80

5c 10 20 30 40 50 60 70 80

5c 10 20 30 40 50 60 70 80 2a 10 20 30 40 50

2a 10 20 30 40 50

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70% of companies 5a Does your company have a corporate strategy around returns? currently have a corporate strategy in 4 Yes 70% place around returns. In Process 13%

No 17%

5a 10 20 30 40 50 60 70 80 5a 10 20 30 40 50 60 70 80

5bDoes your company have published policies around returns? 79% of companies 5b have published 5b policies in place 79% Yes around returns. In Process 14% 5a 10 20 30 40 50 60 70 80 Not Applicable 5%

5b 2% No

75% said that Do your practices align with your policies? current practicies fully 5c 5c 10 20 30 40 50 60 70 80 align with company policies. Yes 75%

Not Fully 6%

No 19% 5c 10 20 30 40 50 60 70 80 5c 10 20 30 40 50 60 70 80

Consumer Returns 2013 Benchmarking Results 6 25% of respondents 6a Who in your company owns returns? said that the 25% operations department owns returns. 17% 17% 13%

8% 8% 6% 6%

Quality Supply Reverse Diffuse Sales Service C-Suite Operations Assurance Chain Logistics Level Groups

48% of respondents How closely do you work with the following functions? reported to working 1206b very close with the customer service 100 5% N/A 7% 10% departments at their 17% 10% 10% organizations. 7% 5% 80 Very 26% Close 26% 24%

26% 60 29% 38% Close 48% 40 14% 31% 40% 43% Somewhat 12% 29% Close 20 10% 40% 17% 33% 7% 14% Not Close 10% 17% 38% 10% 10% 24% 7% 6b Sales Finance Merchandise Customer warehousing transportation Quality Operations Service Assurance

Consumer Returns 2013 Benchmarking Results 7

7a 10 20 30 40 50 60 70 80

7c 10 20 30 40 50 60 70 80

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10 120

100

6b 120

100

20 120 6b 100 Are you using social CRM (Customer relationship management) to engage with 80% of respondents 7a80 your customers? are currently using a 60 scoial CRM system 40 to engage with their Yes 20 80% customers. 6b

7a 10 20 30 40 50No 60 70 80 20%

7a 10 20 30 40 50 60 70 80

43% of participants If so, which social channels are most effective for you? 7b 7b said Facebook is the 7b most effective social 43% Facebook 7a 10 20 30 40 50 60 70 80 channel for their company. 35% Twitter

5% LinkedIn 7b 5% YouTube

12% Other

66% of participants said that their customer 7c Does your customer service center integrate social CRM/social capabilities? service center inegrates social CRM with social 7c 10 20 30 40 50 60 70 80 capabilities. Yes 66%

Not Sure 5%

No 29%

7c 10 20 30 40 50 60 70 80 7c 10 20 30 40 50 60 70 80

Consumer Returns 2013 Benchmarking Results 8

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10 When you go to secondary market, do you feel that you’re cannibalizing 8a new sales? 0 79% 0 When you go to the secondary market, 80 80 79% of participants 8b do you feel that you’re cannibalizing new sales? If so, to what extent? do not feel that they 08 70 70 are cannibalizing new 06 sales in the secondary 07 60 marketplace. 60 05 06 50 50 Estimated @ 20% 05 cannibalization 04 40 40 Of the 14% of

respondents who 04 30 30 feel they are 03 cannibalizing new 03 20 sales in the secondary20 14%

marketplace, 02

respondents estimated 02 10 10 7% 20% cannibalization. 7b 8c 10 01 91 7c 7a 80 60 40 20 6b No N/A Yes 120 100

Consumer Returns 2013 Benchmarking Results 9 120

100

7a 10 20 30 40 50 60 70 80

7c 10 20 30 40 50 60 70 80

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How do you determine appropriate pricing for the secondary market? 8c 8c

40% Market Research

Bid process based on lot product faculty 27%

21% Market Demand

12% Other 40% of participants said they determine appropriate pricing for the secondary How are you working with new sales? market through Market 8d Research.

Working closely We limit Look at new our sales to with engineering, sales and factory marketing, sales strengthen renewed sales the brand during new product together, creating development independent process channels Part of the Close interaction planning to understand process and whole product as forecasting New sales sold and moved Monitoring via Via finance customer service, strategies controllers to RA Dept. and 9102030405incl06ude0 align costs reports from sales team

10 Consumer Returns 2013 Benchmarking Results 10 120

100

120

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7a 10 20 30 40 50 60 6070 80

7a 10 20 30 40 50 60 70 80

7c 10 20 30 40 50 60 70 80

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53% said returns 9 Where does returns management start for you? management starts at Product Design. Pre-Production 16%

Product Design 53%

Customer Service Desk 29%

Other 2%

9102030405060 9102030405060

What are key measures you use in monitoring the performance of 32% of participants 10 reverse10 logistics? said Rate of Return is the key10 measure 32% Rate of Return they use in monitoring the performance of 20% Percentage of Sales reverse logistics. 11% Repair Cost per Unit Returned

7% NTF/ Average Cost for Replacement

7% Defect Verified Rates, NTF rates

7% Gross United Returned

16% Other

Consumer Returns 2013 Benchmarking Results 11 Be a Part of Next About Consumer Returns Year’s Study Consumer Returns is the premier event for reverse logistics and returns management professionals who are looking to trim costs through return reduction strategies and optimization of the reverse supply chain.

In 2014 Consumer Returns has placed an Increased emphasis on some of the hottest product categories in September 8 -10, 2014 consumer electronics: automotive installed electronics, high end over-ear headphones, smart tvs, soundbars, Dallas, TX tablets, video game consoles, wearables. There will also be an increased focused on regulatory matters: Impact of proposed “kill switch” legislation on secondary market, e-waste regulations, controls over the export Register Now of used electronics

What’s New In 2014 · Increased emphasis on About WBR and WBR Digital some of the hottest product categories in consumer WBR is the world’s biggest large-scale conference company and electronics: automotive part of the PLS group, one of the world’s leading providers of strategic business intelligence with 16 offices worldwide. Our installed electronics, high conference divisions consistently out-perform their industry sector competitors on the quality of the end over-ear headphones, events we produce and the relationships we nurture with both attendees and sponsors. smart tvs, soundbars, tablets, video game Every year over 10,000 senior executives from Fortune 1,000 companies attend over 100 of our consoles, wearables annual conferences – a true “Who’s Who” of today’s corporate world. From Automotive events · Focus on regulatory matters: in Bucharest to Logistics conferences in Arizona to Luxury conferences in New York and Finance summits in Hong Kong, WBR is dedicated to exceeding the needs of its customers around the world. Impact of proposed “kill switch” legislation on In addition to our industry leading conferences, our professional services marketing division, secondary market, e-waste WBR Digital connects solution providers to their target audiences with year-round online branding regulations, controls and engagement lead generation campaigns. WBR’s marketers act as an extension of your over the export of used team relieving strain on your internal resources while promoting your brand and solutions to your electronics prospects. Solution providers can target identified accounts or relevant industry/function segments of WBR’s entire global database of over 500K senior-level decision makers.

Consumer Returns 2013 Benchmarking Results 12