Overcoming the Returns Challenge

Tags: Retail, Demand Planning, E-commerce

The world of e-commerce shows no sign of slowing down. As parcel volumes soar and businesses strive to meet customer delivery expectations, returns services can, and have been, easily overlooked.

Considering that in some sectors, such as fashion, returns can be as high as 45% and in the United States, customers are 3x more likely to return an online purchase, it is vital that businesses find ways to manage returns with greater efficiency and less cost.

However, managing the reverse supply chain does not come without its challenges especially at scale and globally. The volumes of returns are putting a huge amount of pressure on business operations. Yet, as long as e-commerce continues to thrive, the returns problem is here to stay.

Simplify and Speed Up Operations By Focusing On Your Returns

The only way that you can ensure you streamline the reverse supply chain and save time is by prioritizing your returns. Returns are notoriously difficult to keep track of. Until they arrive there is little way of telling where they are coming from, what condition they will be in, or why they are being returned.

Being in the dark until the item arrives means that there can be delays in moving stock to the right place. Some stock may even be missed or lost, and inventory getting stuck in the supply chain puts pressure on supply chain managers who need full and early visibility over what’s being returned, why, and the condition it will be in. Only by improving tracking visibility can supply chain managers properly categorize products and manage what can go back into stock and what can’t.

Some items that are returned are not fit for resale. When selling internationally, retailers may also need to look at how they can dispose of them in the local country. In these cases, it wouldn’t be cost efficient to return them all the way to the warehouse just to dispose of them. To handle this, supply chain managers need the visibility to plan ahead of time.

Meeting Customer Expectations of Returns

On top of the operational challenges, retailers want the consumer to be happy with their purchase the first time around. The less inventory and returned stock to manage, the easier day-to-day operations are. Putting the right measures in place to prevent orders coming back should, of course, be a top priority.

This isn’t realistic for every transaction, however. A rise in what is known as “bracketing” is seeing consumers deliberately over-order products. This enables them to physically see or try on items before returning the ones that they don’t want. 35% of consumers now regularly shop this way, so this will represent a good proportion of returns. Prioritizing your returns service to cater for these consumers will give them added reassurance to shop with you, helping you stand out in a competitive market.

Increasingly tech rich and time poor, consumers are naturally demanding more speed, flexibility, and convenience when it comes to returns. In short, the returns service should be as good as the delivery. Failure to offer this is leading to a rise of basket abandonment, with 1 in 5 consumers abandoning a purchase because they are dissatisfied with the returns policy.

How Prioritizing Returns Can Help Improve International Sales

Crossborder returns present further challenges for businesses and many struggle to match the quality of their returns services to their deliveries. This is an area not to be overlooked however, because many international shoppers already feel that buying online is a more of a risk. This is down to the fact that they usually have longer wait times and payments of duties and tax to consider. This makes returns very important for international customers with 47% saying they would be more inclined to shop with retailers who offered a simple returns policy.

Prioritizing your returns service to meet international consumer expectations is therefore key to growing business internationally. The problem is, customer expectations vary so widely depending on the country. In Spain and China, shoppers are most likely to abandon a cart if the returns policy is unsatisfactory, whilst in Germany, shoppers return up to 70% of the fashion items they purchase.

With Brexit around the corner, retailers must also ensure that they can implement the new steps needed to ensure that the reverse supply chain remains smooth across borders. This includes request duty relief on inbound returns from EU countries (including Northern Ireland). Ensuring that you have this covered means that retailers can ensure no further delays to the reverse supply chain.

An Affordable, Competition Beating Returns Service is Essential

There is no denying, returns have become an integral part of online shopping. In order to ensure no delays in the return supply chain and give customers a first-class experience, retailers need a robust returns platform. That includes full visibility over the process, and an easy dashboard for customers to use. It’s vital that businesses have this in order to compete in the global market. More shoppers than ever are prioritising returns, so returns should be a priority for businesses too.


Bobbie Ttooulis is executive director of Global Freight Solutions, a UK-based multi-carrier shipping and e-commerce delivery company.






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