• by Laurie Sullivan  @lauriesullivan, December 31, 2013

Product returns will become the most costly piece for brands and retailers as online sales continue to rise. The trend has AgilOne engineers working on developing features that analyze, understand and identify browsing patterns based on shopping behavior even before consumers sign in to a brand's or retailer's Web site.

The move aims to reduce returns that can cost brands and retailers between $10 and $20 just to put that product back on the shelf, even if it's in great shape.

"Shipping, the reverse logistics charges, can cost anywhere from 3% to 5%," per AgilOne CEO Omer Artun. "On top of that you, have the cost of the discount or the markdown. Certain products like electronics take an open-box hit. On average, if everything is perfect, it's usually about 25%. It could even mean liquidating the product at a store like TJ Maxx."

With 5% returns, Artun said brands and retailers can lose up to 50% of the product's value, but about 2% to 3% of product dollars get lost. He also believes customer-service departments should call the customer during the checkout process, or initiate a Web chat to help a consumer who buying patterns indicate the likelihood of returns, such as buying three identical shirts in three different sizes.

Today, AgilOne's technology can predict behavior based on past purchases for guests, as well as for those who have signed in. The technology allows the brand to link the current order to prior sales. It can tell whether the consumer visits the site on a mobile device or desktop computer. In the near term, the focus for the company remains on acquisition targeting, per Artun. who estimates some retailers and brands can lose 80% of the revenue on returned products.

On Christmas Day, online sales surged 16.5% year-over-year, according to the IBM Digital Analytics Benchmark. comScore estimates that from desktop computers consumers spent $42.8 billion, up 10%, during the 2013 holidays through the final weekend prior to Christmas, compared with the year-ago period.

AgilOne will also release early in 2014 features that allow brand marketers to retarget consumers who have left the site without making a purchase, and provide an incentive for them to come back and complete the sale.