In January, there tends to be a rise in reverse logistics due to the high amount of customers who received holiday gifts that they want to exchange or return. As consumers get more comfortable making online purchases, they also get more comfortable making returns. There are numerous factors to consider - from quick processing and operational optimization to a positive customer service experience.
What is driving the rise in reverse logistics?
- Boom in eCommerce: Digital marketplaces are more convenient than going to a store, and also have more options available. Online shopping has grown significantly in recent years, lending itself to an increase in returns. Consumers will sometimes buy multiple options or sizes to try them out before making a final decision, inevitably leading to one or multiple items being returned.
- Customer expectations: Customers now expect free, quick, and easy returns for just about everything that they purchase. This shift in consumer expectations puts pressure on businesses to have a streamlined and customer-forward return policy.
Key Challenges
- Cost management: Handling returns can be costly. It is important to anticipate expenses such as transportation, labor, inspection, and restocking. These costs can quickly add up, making it essential for businesses to use the most efficient strategy possible.
- Maintaining smooth operations: Managing reverse logistics is tricky due to unpredictable return volumes, conditions, and timelines. It is important to properly manage inventory to avoid overstock or loss and minimize warehouse disruptions. A robust and flexible system to manage inventory along with strategic planning is vital for success.
- Customer experience: With customer expectations for returns so high, a negative customer service experience can turn someone from being a repeat purchaser to not purchasing from your business again. It is vital to have a knowledgeable and friendly customer service team and to handle all products correctly in order to promote a positive customer experience.
Best Practices
- Streamline returns processes: Having clear internal and external returns processes improves efficiency. A clear customer facing returns process not only discourages impulse returns, but empowers customers solve returns problems independently. A standardized internal returns process helps to enhance operations and quickly process the returns. This means a dedicated returns team, a streamlined system for restocking, and clear communication so that all parties are aligned. A streamlined returns process increases customer satisfaction and reduces operational costs.
- Establish refurbishment and resale process: When products are returned, it is crucial to assess their condition to see if they can be used again for another order or if they have become obsolete. Some products will come back brand new and can go straight back into inventory. Some items will need to be steamed or repaired a bit before being sold again. Create a process for getting those items ready for sale again so that no products go to waste. Ensuring all items make it back into inventory reduces waste, maximizes resource utilization, and contributes to a more efficient supply chain.
- Analyze return data: Use data to pinpoint common issues and provide insights to minimize returns in the future. By leveraging a wide array of advanced technology, businesses can create insights that help manage, organize, and streamline the returns process. This enables companies to address the root cause of returns while also enhancing overall operational efficiency. This return data can also be used to refine product offerings to better meet customer expectations so that less returns are necessary in the future.
While returns are on the uptick, specifically in January but all year round, they don't have to weight down your business. Implementing effective strategies and using advanced technologies, businesses can turn returns from a challenge into an opportunity for growth.
Need help managing your reverse logistics? Contact Brandfox to learn how we can help you manage all of your returns and exchanges.