New Product Development – The solution to your product returns nightmare?

As a small business owner in the UK, you understand the importance of providing high-quality products to your customers. However, even the best products can be returned for various reasons, and high product return rates can be a major challenge for small businesses. They can lead to reduced profits, wasted resources, and damage to the business’s reputation. In this blog post, we will discuss the problem of high product return rates for small businesses and provide effective strategies to reduce them.

Firstly, we’ll explore the root causes of high product return rates and the importance of identifying them. By identifying weak points in the manufacturing process, we can determine where improvements can be made. Effective data gathering and analysis can help identify potential causes of the problem that may not be immediately apparent. The “5 Whys” method is an effective technique for identifying the root cause of a problem with a product. In some instances, packaging design or the clarity of the instruction manual can be partly to blame and so a holistic approach must be taken to research the root cause. Once the root cause of the problem has been identified, it’s important to develop and implement a solution that addresses that cause.

Secondly, we’ll discuss the importance of new product development in reducing product return rates. Product development strategies can include designing a whole new product, examining production processes and materials, or redeveloping one section of the existing product.

Thirdly, testing new products thoroughly before releasing them to the market is crucial. Quality-control tests and asking customers to provide feedback are effective strategies for testing new products. This customer feedback during the development process and should be used to identify further areas where improvements can be made and test potential solutions to the original problem. Post launch of the modified product it can be important to communicate with customers about the changes made to the products. Effective communication strategies such as marketing campaigns, social media, and other channels can help build trust and loyalty among customers. This may even result in further sales as existing customers seek to upgrade.

Customers who experience problems with a product are more likely to share their negative experiences with others, which can ultimately lead to a decline in sales and customer loyalty. Therefore, it is crucial for small businesses to take the necessary steps to reduce product return rates and protect their bottom line.

I. Identifying the Root Cause of the Problem

One effective technique for identifying the root cause of a problem with a toaster could be to use the “5 Whys” method. This involves asking “why” five times in a row to get to the root of the problem. For example, if the problem is a toaster that keeps burning the bread, the first “why” might be “Why did the bread burn?” The answer might be “Because the toaster heats up too quickly.” The next “why” would be “Why does the toaster heat up too quickly?” and so on, until the root cause of the problem is identified.

Once the root cause of the problem has been identified, it’s important to develop and implement a solution that addresses that cause. For example, for a toaster that heats up too quickly, the solution could be to change a temperature control feature that ensures that the toaster heats up to the desired temperature and no more. Equally there might be an issue with the markings on the dial or slippage between the control knob on the actual electronic component. Continuing to ask “why” will help identify the actual root cause and then you can solve it.

Another useful technique is to gather data and analyse it to look for patterns or trends. This can help identify potential causes of the problem that may not be immediately apparent. It’s important to gather data from multiple sources and to look at both quantitative and qualitative data to get a complete picture of the situation.

Often conducting interviews with specific customers to dig into their reviews in more depth can reveal further pertinent information that their initial review didn’t reveal. Really getting to the bottom of the issue is a critical first step – resist the temptation to jump into problem solving too soon.

The Paradox of Success: The Profit-Draining Bin

In the competitive world of consumer products, one client’s automatic-opening bin seemed to have struck gold. The product resonated with the target market and flew off the shelves, thanks to effective marketing campaigns and an undeniable product-market fit. However, as any successful business owner knows, sales are only part of the equation. Profit is what truly drives a business forward, and here’s where the problem arose: a staggering 10% return rate was slowly but surely eating away at the profits, turning what should have been a victory into a financial nightmare.

The business owner, already stretched thin by the demands of a thriving business, was now grappling with a returns nightmare. The factory, his partner in production, showed a lack of concern and cooperation, leaving him to question the future of his once-promising product. In a mix of frustration and resolve, he reached out to D2M for help. The question was, what was causing the high return rate, and could it be resolved? The answer is revealed later in the blog.

2. New Product Development – The solution?

Product design is one of the most effective strategies for reducing product return rates. By analysing customer feedback and identifying areas of the product that are not performing well, businesses can rework the design to create products that are less likely to be returned.

Furthermore, product design can also help businesses identify likely failure points and create structural product packaging to reduce damage during shipping and handling. These improvements can significantly decrease the likelihood of product returns and increase overall customer satisfaction.

Incorporating new product development strategies, such as product design, can help businesses reduce product return rates and create products that better meet customer needs. By continuously striving to improve product development strategies, businesses can ultimately create a more successful and profitable business.

When products are sourced directly from a factory and designed by the factory itself, they are often not designed for longevity. This is because the factory’s main goal is to produce products quickly and efficiently, rather than to ensure they last a long time. In addition, factories may not have the necessary expertise or resources to design products with longevity in mind, as this requires a deep understanding of materials, engineering, and user needs. As a result, products that are designed and sourced in this way may be more prone to breaking or wearing out quickly, which can be frustrating for users and lead to a higher rate of replacement and waste.

If you’re running a business that primarily deals with selling sourced products, it’s important to be aware of the potential risk of having a high returns rate. This can not only result in lost revenue, but also negatively impact the reputation of your business.

But if you’re already in this scenario what do you do now?

1. Collect and Analyse the Right Data: The first step in reducing product returns is to collect and analyse the available information. This includes discovering the reasons for the returns, such as product defects, shipping damage, or customer dissatisfaction. By collecting and analysing this data, you can identify patterns and trends that can help you create a design brief for product development.
2. Engage with Customers: Another effective strategy is to engage with your customers to gather feedback on the products they have returned. This can be done through surveys, focus groups, or social media. By understanding the reasons behind their returns, you can identify areas for improvement and incorporate this feedback into your design brief.
3. Collaborate with Suppliers: Working closely with your suppliers can also help you reduce product returns. By collaborating with them, you can identify any issues with the materials or components used in your products, and work together to find solutions. This can help you create a more durable and reliable product that is less likely to be returned.

In some cases, designing a completely new product may be a more effective approach than trying to fix an existing one when it comes to reducing product returns rate. One advantage of this approach is that it allows the company to start fresh and incorporate customer feedback and preferences into the new product design. It also provides an opportunity for the company to innovate and differentiate itself from competitors by creating a unique product that meets the needs of consumers. Additionally, a new product design can often be more cost-effective in the long run, as it can reduce the need for ongoing maintenance and repairs that may be required with an existing product. Overall, using new product development to reduce product returns rate can be a strategic way for companies to improve customer satisfaction and increase profitability.

In fact when investigating a product defect, there are several potential outcomes that may arise. These outcomes will depend on the nature of the defect and the extent to which it impacts the product’s overall functionality. Here are five possible outcomes of an initial investigation into a product defect:

1. Redesign a specific element of the product – If the defect is limited to a specific part of the product, it may be possible to redesign that element to eliminate the issue. This could involve changing the shape, size, or material of the part.
2. Complete re-design – In cases where the defect is more widespread and affects multiple parts of the product, a complete redesign may be necessary. This would involve starting from scratch and developing a new design that addresses the issues identified in the investigation.
3. Improved quality control in the factory – If the defect is related to a manufacturing issue, improving quality control measures in the factory may be necessary. This could involve changes to the manufacturing process or additional checks and inspections to ensure that products are being produced to the required standard.
4. Change of materials for an element of the product – If the defect is related to the materials used in the product, it may be necessary to switch to a different material. For example, if a plastic component is cracking, switching to a more durable material like metal may be necessary.
5. Sourcing a third-party component – In cases where the defect is related to a specific component of the product, it may be possible to source that component from a third-party supplier. This can help to reduce manufacturing complexity and ensure that the component is of the required quality.

One important side issue to consider is that really product returns shouldn’t occur in the first place. Here are 4 things product businesses can do to limit the number of returns:

1. Thorough testing before launch – One of the most effective ways to minimise product returns is to ensure that the product is thoroughly tested before it is launched. This includes conducting quality-control tests and asking customers to provide feedback.
2. Clear product descriptions and instructions – Providing clear and accurate product descriptions and instructions can help customers to understand how the product works and what to expect. This can help to reduce confusion and misunderstandings that may lead to product returns.
3. Quality Assurance is a proactive approach that involves planning, designing, and creating processes that can prevent defects from occurring in the first place. It involves continuous monitoring of the processes used to create the product, identifying gaps, and implementing improvements. QA ensures that the product meets the required quality standards.
4. Quality control measures during manufacturing – Implementing quality control measures during the manufacturing process can help to identify and address any issues or defects during manufacture but before the product is released. This can help to reduce the likelihood of product defects and returns. Inspecting 1 in 10 product for particular defects would be an example of this.

Back to the story…

D2M’s team set out on a mission to uncover the hidden issue that was causing the high return rates, using their investigative “5 whys” research method and a customer-centric approach. Their research was meticulous, leaving no stone unturned and no user feedback unheard. Finally, the team came up with a prototype, which promised to redefine reliability for the automatic bin.

The prototype wasn’t just a temporary solution, but rather the beginning of a revolution in the product’s design. D2M employed advanced design for manufacture techniques to ensure that the solution was not only effective but also economically feasible. The team worked closely with the factory’s engineers to refine and evolve the mechanism, transforming it from a reliable prototype into a mass-producible reality.

As the new design launched, the client witnessed a significant drop in return rates, which was a direct reflection of the product’s newfound reliability. Profits were no longer being held hostage to returns, and the business owner could finally breathe a sigh of relief and enjoy the commerical success.

Now let’s get into testing in more detail as this is critical to avoid these issues occuring and often it doesn’t need to fall on the busy business owner to do this.

In order to ensure that new products are tested thoroughly, many companies choose to work with third-party agents based in countries like China, where manufacturing is often carried out. These agents can handle the testing process for you on an ongoing basis, providing regular reports on the quality and performance of the product. Alternatively, they can work with the factory to set up internal testing processes and quality-control measures for an initial fixed fee.

Working with third-party agents has several benefits. Firstly, it allows companies to benefit from the expertise of those who are familiar with the manufacturing processes in countries like China. This can help to ensure that the testing process is carried out rigorously and that any issues or defects are identified and addressed before the product is released to the market. Additionally, working with agents can help to reduce the costs associated with setting up internal testing processes and hiring additional staff.

Overall, testing new products thoroughly is essential to ensure that they meet the required standards and expectations. Working with third-party agents based in countries like China can help to ensure that the testing process is carried out effectively and efficiently, allowing companies to focus on other aspects of the product development process. By making changes based on feedback, companies can improve the quality of their products and increase customer satisfaction, which can lead to increased sales and brand loyalty.

In conclusion, high product return rates can be a major challenge for small businesses, leading to reduced profits and a damaged reputation. However, by implementing the strategies outlined in this blog post, businesses can reduce product return rates and achieve long-term success. Identifying the root causes of product returns, incorporating new product development strategies such as product design, conducting thorough testing before launching products, and working with third-party agents for testing can all help to improve product quality and reduce returns. By doing so, small businesses can increase sales, improve their reputation, and ultimately achieve their goals. Incorporating new product development strategies is a valuable way for businesses to meet the demands of today’s competitive marketplace and better meet the expectations of their customers.

If you’re a small business owner looking for experienced senior designers to help you reduce product return rates and improve your reputation, don’t hesitate to get in touch with our company. Our team of experts can guide you through the product development process and help you achieve long-term success. Contact us today to learn more.