By Mark Halper
Posting in Education
Only 5 percent relates to faulty products. A good chunk is spoiled, fickle consumers. 'Wah wah, my iPod's the wrong color.' Huge eco, business costs. Oh what $17 billion could buy. Merry Christmas!
According to research by consulting firm Accenture, 27 percent of the returns will tie into "buyers remorse", and 68 percent will fit a category called "no trouble found." My interpretation: the industry is paying a huge price to support spoiled and fickle consumers, as in, "Wah wah, I wanted a blue iPod, not a white one," and "Why did I get an XD when a I wanted an XS?"
To be clear, that's not exactly Accenture's translation. The "no trouble found" group seems to describe people who couldn't get their device to work. Accenture rightly points out that industry needs to improve usability.
But let's face it, consumers in the cry baby economy say anything when they return items. "No trouble found" in many cases will be a euphemism for "woops I changed my mind." The "buyers remorse" group isn't even a euphemism. I'll take an educated guess - probably a low one - that $10 billion of the returns relates to pampered purchasers.
As Accenture notes in so many words, this all wreaks havoc on the environment. "These costs include receiving, assessing, repairing, reboxing, restocking and reselling returned products," Accenture says in a press release. The subtext of this is that companies and consumers waste gasoline, packaging and materials, not to mention precious time and other resources.
From a business perspective, "These high consumer electronics return rates are unsustainable in a sector with brutal competition and thin margins,” says Mitch Cline, managing director of Accenture's electronics and high-tech group.
According to an Accenture report called "A Returning Problem: Reducing the Quantity and Cost of Product Returns in Consumer Electronics", the $17 billion bill will be 21 percent higher than in 2007.
Just think what $17 billion - or even the $10 billion cry baby portion - could contribute to, say, developing clean water systems in Africa.
Image: Mike Licht/NotionsCapital.com via Flickr
Dec 13, 2011
Last year I got rid of everything that had XP or Vista and replaced it with two new notebooks and an IPad. While the extra speed is nice, I can't say I'm doing more with my computers - only less. MS Office 2010 is so darn hard to use I'm driven half nuts even though I've been using other versions since the early 90's. In the late 80's I did desktop publishing for a nice resort with duel 5 1/4 floppies and the software First Choice. Easy to use and looked great. Now stuff has become so darn feature rich, I spend twice and much time figuring out how then the actual project. I've never once returned anything but I do agree there's a lot of people who think they want something today but then figure out they've got to pay for it later. Only proof we've got more than we deserve and need if you ask me. I detest waste. This article only proved the point once again.
Although I fully agree with the criticism of the environmental costs of unnecessary returns, I do see some bright spots. One. 'Buyer's remorse' means that the purchaser may end up buying nothing instead. Yes, the item was manufactured and it'll be re-sold again (in all likelihood), but, if the original purchaser walks away that is hopefully a small net gain for the environment. As for the 17 billion dollar price tag--my guess is that's the _value_ of the returned products as opposed to the cost to the industry/society. Which means that 17 billion dollars wouldn't be available to mitigate the impact of humanity elsewhere. In all likelihood the net drain is only a few hundred million (nothing to sneeze at either but also not a dollar value that can be captured). Ideally we'd convince people to look inward for fulfillment--and, religion probably isn't the answer given that the US has regions where religiosity is extreme and all-pervading yet those same regions are also (proportionate to their wealth levels... since religiosity and poverty are often linked) still ultra-high consumers (especially when you couple the SUV-truck lover with religion :(.
I am a 60 year old geek. I have been involved with computers since the 8080 chip. I have patents, started a company, and have run it for 20 years. We sell a technology/product that gives machines the ability to feel. I would not classify it as a successful business. Why? Humans take 20-30 years to adapt to understanding new technology. Call it cultural if you wish but it applies generally to the masses. The flexibility of our product to allow it to be adapted to many different processes adds user complexity yet to be overcome. Today's products are designed to do everything and more time is spent providing flexibility than determining if it is needed. Examples would be migration from Word to Office Suite. The first two products were used by everyone until they were "featured" to death. Then the user interface was "simplified" to appeal to new users...that left old users lost and new users no place to go for help. As a result most people today do not use these products or even free equivalents...they use email and even that is falling away. In running my business I can honestly say I can count on one hand how many times I have used Office in the past year...not because the functionality is not needed but the time to learn how to use it is not worth the loss in presentation quality vs. email. The amount of time consumed in maintaining technology has far outstripped the return it provides in saving time. Most of this comes from supporting bugs in feature creep rather than supporting the core function of the product. Today's consumer products are overwhelming with features and provide multiple ways to get the same task done. For example, the simple task of converting VHS tapes to digital form for storage using a single button product still requires that one learn and use a complex interface providing flexibility for the variation in worldwide broadcast standards, output formats, etc. Crossing the Chasm, a 1991 book by Geoffrey A. Moore, so prophetically addresses the problem of marketing and selling high tech products to mainstream customers. The main point I gleaned from that book, and one I wish I was aware of when I first started our first product, was that success in business of high tech comes for getting rid of the flexibility in products early and focusing on a simple single benefit that customers want. That is the opposite of today's world where we turn televisions into replacements for the PC and telephones into entire office product replacements. I do not knock this progress...it is wonderful...but what we do not do is provide versions that do one task without dependence on the others or manuals to support the usage of features. It never ceases to amaze me that the iPhone requires that you have nothing but iPhone friends in order to learn how to use the phone features...no manuals. Paid for Apple support does not even know anything about new features to provide support and states same at the beginning of the call, and online resources are weak. They do have one thing going for them...ego. No one will return and iPhone lest they be judged by their peers as uncool.