If you’re not moving forward are you in reverse?
Oct 06, 2020 Comments (0)
We all know online shopping increased during lockdown but so too did volumes of returns given that online purchases are three times more likely to be sent back than goods bought in stores.
When it comes to clothing, if folk can’t try items on they’re using their homes as changing rooms and ‘bracketing’ by buying the size up and size down, so at least two-thirds of the order is definitely going to be returned!
A recent report* suggested that with e-commerce revenues growing at 15% a year and return rates at close to 30% of sales, we can expect four billion units to be added to the reverse logistics pipeline by 2022. Having a sound reverse logistics strategy, therefore, is going to be vital to maintain both healthy inventory turns and operating expenses.
Numerous studies show that consumers won’t buy from you unless they’re confident they can return the items easily and conveniently. A report I read recently suggests 46%† of consumers were put off a purchase by an unfavourable returns policy. A whopping 74%* would be deterred by return shipping fees. It seems the honeymoon period is over where shoppers would happily pay delivery costs during lockdown as an appreciation of keyworker delivery personnel, their patience in waiting for refunds is also wearing thin.
Many brands work hard to streamline their reverse logistics processes, including returns portals, or returns labels in with the shipment. This is not only more convenient for shoppers but also gives brands far greater visibility and enables them to direct returns to the optimum location to be received and processed more quickly back into the inventory.
Returns in transit or in process are lost opportunities for retailers. The longer an item is unavailable for sale, the less valuable it becomes so getting it back on sale or some other form of disposition is vital to maximise recovery.
Technology is an essential component of this process and mobile computers, scanners and printers like those from Zebra work with your enterprise systems to give you total visibility across your operations. They allow you to efficiently process customer returns, put seasonal and surplus inventory back into stock, or identify goods for refurbishment or disposal.
The mobile computers scan and record the condition of the returned item upon receipt to ensure goods are restocked, refurbished, or discontinued. Quarantining each return for safety purposes currently adds yet another time delay to check if returned goods are suitable for resale but firms are bound by the restrictions.
Having faster and more efficient operational processing is fundamental to managing reverse logistics. Transport choices certainly play a part in that as does infrastructure, and maybe your operation’s forward logistics channel doesn’t work so well in reverse and you’d be better using a third party to manage your returns. Such considerations all need to form part of a wider reverse logistics strategy that takes account of supplier arrangements, returns options and policies, how you resell or dispose of returns, and analysis of why people sent the goods back.
As we edge ever closer to shopping spikes like Black Friday, Cyber Monday and Christmas we know online purchases are going to be at peak levels but so too will returns. Better managing returns must therefore move higher up in priority for retailers and manufacturers. There’s not just the financial impact on inventory to consider but also the effect on customer retention; 96%* of customers would shop again with a retailer based on a positive returns experience.
Technology can really help facilitate the reverse logistics process and replace error-prone paper-based systems. I think it was Gorbachev who coined the phrase: ’if you don’t move forward you begin to move backward.’ In this instance, you need to move your ‘reverse logistics’ forwards otherwise your business will start moving backwards.
* Source: ‘Bringing it back’ report, Deloitte 2020
† Source: eCommerce Delivery Benchmark 2020, Metapack
Renovotec is the UK’s largest independent rugged hardware and maintenance, software and services company. Managing Director Richard Gilliard has helped lead the organisation for over 25 years, supporting customers across many sectors including warehousing and distribution, transport and logistics, manufacturing, retail, healthcare, seaports and field mobility. Richard's drive is to enable firms through…