Flipkart's returns under the spotlight
The India Times published an article about Indian online retailer Flipkart (recently bought by Walmart) and its problems with high returns. The author commented that in India return rates are ‘high’ i.e. around 30%. In our view, such figure is mostly irrelevant from the statistical perspective, as the key factor in the online returns rate is the type of merchandise. Flipkart thinks that the returns are the fault of its suppliers, so it will start auditing them, to “reduce returns by 10-15% in the next 12 months”. Our learnings from Total Quality Management tell us that such arbitrary targets make little sense. Flipkart would be better off analysing return rates by category and then consider eliminating some of the categories from its range. Some products were never meant to be sold online.