PROFILE

Peter Sobotta

Founder & CEO, ReturnLogic
Peter Sobotta is the founder and CEO of ReturnLogic, a technology startup that enables retailers to manage and optimize their product-returns strategy. Sobotta is a known industry expert and thought leader in the field of reverse logistics, ecommerce and supply-chain management. Read Peter's blog posts on The Reverse Logistics Blog...
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  • Posted on: 05/22/2018

    Amazon bans chronic returners

    Large retailers do not take to banning customers lightly. After all, they have invested in acquiring and serving these customer. The difference is that retailers now have the tools to accurately calculate returns costs into the customer lifetime value equation. With this clarity comes the ability to know exactly how profitable a customer is, and find opportunities among underperforming cohorts. However, when it becomes clear that specific customers will never be profitable and are actually a negative ROI, well that's where retailers need to make tough decisions. Customer centric return policies come at a cost. But the increase in sales, as Amazon has proven, and an efficient reverse supply chain can pave the way for data centric retailers to set themselves apart. The noted bans may spark interesting discussions like this thread and perhaps catch the attention of the media as it always seems unfair for the consumer. But again, retailers have already made this calculation and press awareness may very well be part of the tactics. If a customer is not profitable, and never will be because of specific returns behavior, is it really unreasonable for a retailer to fire that customer?
  • Posted on: 01/26/2018

    What’s the trick to handling online returns?

    Well stated Paula. Adding to this is the fact that every vertical has different processes and opportunities for optimization. Hence a 20% return rate for an apparel company may be great, but for a consumer electronics company this would be terrible. Having relevance behind these numbers is what matters. Otherwise they are vanity metrics.
  • Posted on: 06/13/2017

    Can retailers escape the scourge of free shipping?

    Free shipping and free returns are now entry-level tickets to modern ecommerce. Primarily because they reduce risk for the consumer and hence lead to increased sales. For retailers that sell quality items and deliver a quality experience, the benefits surpass the costs. However, for retailers that are not customer centric and under deliver on value, the costs exceed the benefits. Retailers that failed to see this shift happening are paying the price and scrambling to catch up.
  • Posted on: 05/09/2017

    Will next day delivery make Target an omnichannel force?

    Perhaps Target is not flailing or making "me too" attempts to address declining store sales, but rather running iterative experiments before they go all-in on a larger strategy. Notice how Target recently partnered with TechStars to find innovative startups in retail tech. Combined with new approaches and a deeper understanding of customer needs, Target may actually be poised for many years of positive bottom-line growth. That is, once they are ready to scale and fully commit.
  • Posted on: 03/28/2017

    Do retailers need middle men to match them up with tech startups?

    Large retailers like Target and Walmart are wise to look beyond their inner circles for new innovation and opportunities. The seeds of innovation often start as humble ideas that do not seem relevant until they are. That's the vision large organizations often have difficulty seeing. From an ROI perspective, the amount of capital deployed to support such programs is trivial compared to the upside. I think we will see more of these programs as modern retailers demonstrate their value.
  • Posted on: 03/09/2017

    Are free returns a good way to drive online sales?

    At least until apparel retailers fix the size and fit problem. At which point a liberal returns policy would be far less painful. Returns happen because retailers fail to meet the expectations of the customer. It could be quality, it could be price, it could be damage, it could be anything. But it is almost always the fault of the retailer. Once this issue is addressed, return rates drop significantly. It is the ultimate test of how customer centric a retailer is. No faking it.
  • Posted on: 03/09/2017

    Are free returns a good way to drive online sales?

    Good points Brandon. Retailers that do not view returns management as a core competency are at a significant disadvantage. As a result, their bottom line suffers.
  • Posted on: 02/16/2017

    What does it take to drive a top-down plan for customer-centricity?

    It takes a bottoms-up approach. Companies can't suddenly decide to be customer-centric -- it is ingrained in the founding DNA. That is the reason Walmart.com could never compete directly with Amazon in terms of the customer experience. Walmart finally realized this and purchased Jet.com in hopes to close the gap. And that's the power of being truly customer-centric. It must be authentic and can't suddenly be decided in a board room.
  • Posted on: 02/13/2017

    Should L.L.Bean ditch its legendary return policy?

    Free shipping and free returns are now entry-level tickets to modern e-commerce. In fact we now live in a returns economy. L.L. Bean is very wise to review this policy and determine if it still makes sense. $1 saved in returns prevention equals $20 in new sales activities. There are no other places that retailers can find such an ROI. Sure some customers will be upset and churn, but perhaps these are the customers that L.L. Bean wishes to minimize. I would not be surprised to see L.L. Bean follow what Costco did years ago with respect to their open-ended returns policy. Retail is under intense pressure and returns may very well prove to be the final battleground that determines the winners and losers.
  • Posted on: 01/13/2017

    Penney CEO says stores critical to omnichannel push

    There is a reason why Amazon is considering kiosks and now physical stores. Clearly a positive omnichannel experience is a good strategy. For J.C. Penney, a better question would be framed around their product offerings and ability to drive profits from this approach.
  • Posted on: 12/22/2016

    Are retailers over-promising last-minute BOPIS?

    This category is reserved for retailers that have essentially exhausted every other efficient marketing opportunity and are now targeting smaller customer personas. In this case the customer that literally waited until the last minute. How big that market is and how efficiently retailers can access it will ultimately determine if we see this trend continue.
  • Posted on: 12/14/2016

    Will Amazon button down the menswear category with its new private label line?

    Launching the private label for Prime members only is a very smart strategy for two reasons. First it allows Amazon to segment the offering to known early adopters and loyal Amazon customers. Respectively, the feedback loop will be faster and the total risk exposure is limited. Second it reinforces the exclusivity of being a Prime member. And we all want to be in the "in" group, otherwise we would order a large coffee and not a "Venti."
  • Posted on: 11/30/2016

    What convinces retailers to innovate?

    Fear of failure is the enemy of change. And the majority of decision makers are unwilling to make a major bet on an unknown innovation with no proven ROI. To counter this we have seen some organizations such as Walmart and Target create "labs" where innovative ideas are explored and perhaps implemented, e.g., Walmart Labs. But this is very different than an internal change agent that champions an unknown future state. I don't believe large retailers can structure their decision making to foster change. Instead they must accept that change is inevitable and disrupt themselves into a new category.
  • Posted on: 10/24/2016

    Saks, Ralph Lauren lure customers with upscale services

    It is clear that retailers who are truly customer-centric reap the rewards of repeat customers and lower churn. The question is, how much are customers willing to pay for this level of service?
  • Posted on: 10/14/2016

    Target to test vertical farms in stores

    Good for marketing and PR, but the scalability, execution and ultimately the ROI may prove to be a significant challenge. That said, I like the concept and it is a step in a good direction.
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