Reverse logistics will be on the agenda of many businesses in the coming months. In today’s dynamic eCommerce landscape, returns management has become a pivotal business focus. With online sales and omnichannel commerce firmly established, efficient handling of returns is more critical than ever. Statistics indicate that approximately 16% of online orders are returned, amounting to a staggering cost of $101 billion.
As a result, many brands are increasing the size of their teams, increasing warehouse space and establishing dedicated returns management teams.
What is Reverse Logistics?
Reverse logistics refers to the process of managing the return of goods from customers back to the manufacturer or retailer. Unlike traditional logistics, which involves the forward flow of goods from the manufacturer to the end consumer, reverse logistics involves handling products that move in the opposite direction. This can include activities such as product returns, repairs, refurbishment, recycling, and disposal.
Returns are an unavoidable part of retail in bricks and mortar, but more specifically for online sales. To give them a rather general term, many returned goods are ‘not suitable’ returns. They are items that are still in working order and in saleable condition, but the customer has either chosen the wrong size or changed their mind after receiving the delivery.
Returns impact sales, and sales rely on returns
There is a chicken and egg problem with returns. Without a policy that favours the buyer by offering an easy and usually free returns process, the retailer risks dissuading the consumer at the point of purchase. The result of this is that consumers are more inclined to purchase with a return in mind. As one shopper told the BBC about returning items, “… If I’m not paying for postage, I might as well.” This leaves the retailer between the rock of needing to meet customer expectations and the hard place of bearing the burden of those returns.
The solution can not reduce consumer confidence by making returns more difficult because the more straightforward the return, the more that brand confidence grows.
It’s more than consumers who increase returns
Returns are influenced by more than just consumer preferences. Factors within your manufacturing, marketing, and supply chain processes can also play a role.
Effective marketing is crucial for driving sales. However, if your marketing promises more than it delivers, it can harm your brand and lead to increased returns. Common issues like misleading imagery or inaccurate descriptions often result in returns.
Additionally, returns may surge due to manufacturing issues, such as slightly smaller products or quality faults. While these challenges are unavoidable, partnering with the right 3PL provider for reverse logistics can help mitigate these issues.
With consumer expectations rising, the average amount of days consumers are willing to wait for their orders across all product categories decreased from 2.36 days in 2022 to 2.15 days in 2023. This emphasizes the critical importance of swift and efficient delivery processes to minimize dissatisfaction and potential returns.
How the right 3PL partner can improve your returns management
Having the right 3PL partner can be a game-changer for your returns management process. It’s a crucial element that not only impacts your ongoing sales but also directly influences your bottom-line profits. This is why retailers, regardless of their size, are increasingly turning to 3PL providers. They play a pivotal role in streamlining returns and minimizing the time it takes for returned items to be back on the shelves.
In an ideal scenario, when a customer initiates a return through your chosen method, your 3PL partner should not only respond promptly but also in the most effective manner. Upon receipt, all returns should be meticulously examined, and the reason for return should be accurately reported. Moreover, this information should be seamlessly integrated into your stock-control platform in real-time.
The crux of the matter lies in the real-time reporting of return reasons and the early detection of any unusual trends. For instance, if there’s suddenly a surge in returns for ‘item too small’ and this can be traced back to a specific SKU, you’re in a better position to address this with your manufacturer and prevent a recurrence. Similarly, if a particular SKU consistently garners high returns for ‘not as expected’, it might prompt a review of your marketing materials.
Improving your operations by going the extra mile
When searching for a new returns management partner, it’s about more than just fast order dispatch and return handling. To truly optimize your returns management process, you need the right partner.
At Synergy Retail Support, we take it a step further by subjecting all items to thorough inspections by our specially trained Quality Control Teams. This goes beyond basic handling; it allows for necessary corrective actions, ensuring that saleable products are repackaged and swiftly returned to stock. As soon as they’re back in the inventory, these items become instantly visible as saleable stock assets, ready to be turned around for a new sale in record time. For items requiring additional attention, our on-site experts are readily available to help, saving you the cost of item disposal or shipping them elsewhere for repair.
What sets us apart is our ability to monitor returns by batch and SKU from the moment they’re scanned back into the system. This system alerts us to potential batch issues and returns trends that might compromise product quality. Your dedicated account manager can then proactively notify you about these trends. The outcome of this meticulous process is a significantly more efficient returns system, bolstered confidence in the quality assurance applied, and a swifter turnaround from return to making the stock available for sale.
In a fiercely competitive market, your confidence in the efficiency of your reverse logistics is paramount. Without it, costs escalate, and consumer trust wavers. Ultimately, a streamlined, precise, and seamlessly integrated reverse logistics system could be the differentiator that propels an eCommerce brand to the forefront of consumer confidence.
Should you wish to explore how our reverse logistics service can enhance your operations, don’t hesitate to reach out. Contact us today for a comprehensive discussion.