Global e-commerce retail sales have almost reached USD 5 trillion in 2021, they are expected to reach USD 5.5 trillion by 2022 and a staggering USD 7,4 trillion by 2025, according to figures released by Statista in early February. This surge is due to the digital transformation and new consumption habits, which have been boosted by the lockdowns due to COVID.

Considering this growth and the fact that the return rate on online sales is around 30%, reverse logistics is a growing market and concern for e-tailers. Processing returned items is expensive because of increasing shipping costs, supply chain disruptions and labor scarcity.

These new logistics challenges represent a significant profitability risk on the one hand and a real opportunity for growth on the other. How you manage returns on unwanted or damaged products is a powerful differentiator, a competitive advantage and even a source of profitability. Find out why good returns management is a strategic matter and what solutions can help you address the logistical challenges it creates.

 

A satisfactory return experience can build up your customer’s loyalty

With the emergence of e-commerce, new consumer habits have developed, especially for fashion items. Online customers usually order several sizes and/or colors of a given item to try at home, which obviously implies a high volume of returns. Indeed, the return rate for online purchases is around 30%, compared to 9% for purchases made in stores.

Because of these new habits, 90% of customers read the returns policy before they place an order. The way you handle returns is thus crucial for your customer’s shopping experience and consequently to encourage their loyalty. Indeed, 95% of satisfied customers come back, when 90% will not if they’re dissatisfied.

A satisfactory return experience can therefore be summarized in 3 keywords: ease, speed, and communication:

  • Easy returns: With a user-friendly and efficient returns management digital interface your customer can get a return slip, find a drop-off station, or book a home pick-up and follow the return and refund in real-time with a few clicks.
  • Speedy returns: A quick return and refund or exchange is important to build trust and loyalty.
  • Good communication: By keeping your customer informed at all times is reassuring and relieves your customer service from many requests. It is also an opportunity to obtain information such as why the product is returned, which will allow continuous improvement.

A good returns management is therefore essential for the satisfaction of your customers, but it is also essential for the efficiency of your company and consequently for your profitability.

Read also: Drive Customer Loyalty with an efficient returns management solution

 

A good returns management is strategic for the efficiency and profitability of your company

Your company may be very efficient in its outbound logistics management, but reverse logistics is another matter. It requires procedures to:

  • Facilitate reshipping by the customer
  • Forward the returned product
  • Identify and verify the product upon its delivery at your warehouse
  • Recondition, restock, or recycle returned products
  • Replace or refund returned orders

And all this quickly, seamlessly, and painlessly for your customer.

Most of today's return logistics solutions involve multiple actors: a digital interface, a last mile carrier to pick up the product, a forwarder, a warehouse equipped for verification and restocking, etc. If the various steps are not well coordinated, it can easily lead to delays, lack of visibility not only for your customer, but also for you, which can ultimately seriously impact your reputation and profitability.

Inefficiency has a cost that can be significant. The cost of processing a returned item is estimated to be between $20 and $45, so it's important to have a good return strategy in place. Streamlining reverse logistics operations speeds up the returns process to get items back on the shelf quickly and improve customer satisfaction. The main efficiency levers you should consider:

  • A user-friendly interface on the brand's website for requesting a return, printing a return slip, choosing between refund and replacement, and declaring the reason for the return
  • A flexible return solution that allows the package to be dropped off at the post office or a collection point, or to be picked up at home
  • An efficient and transparent tracking system for customer service relief and optimized inventory management
  • Quick return to market: optimized inspection process, repackaging and restocking, especially for seasonal products
  • Customer data collection throughout the purchase and return process to anticipate next steps (refund or replace) and feed your continuous improvement strategy

Because having multiple providers can be a source of confusion or mistakes, there are now new integrated solutions that can adapt to your particular needs.

 

New integrated solutions to meet the challenges of reverse logistics and create an optimal customer experience

As new technologies profoundly change consumer habits, they also open up a world of new possibilities for smooth and efficient returns management. Interconnecting all parts of the returns logistics chain with fully integrated solutions enable:

  • Real-time tracking
  • Seamless communication between inventory, logistics, sales and returns systems thanks to individual and unique product and customer account identification
  • Automated return management for faster processing, fewer errors, and full traceability of all transactions
  • Transparent and efficient interactions between customers, staff, and service providers
  • Integrated omni-channel approach for brand consistency and greater customer satisfaction as they can choose where they buy and where they return their items
  • Manage repair and end of life of products in a circular economy perspective

Integrated solutions ultimately contribute to your bottom line by increasing inventory turnover, improving product availability, and accelerating product return to the shelf, especially for seasonal products, thereby reducing outlet sales and scrap and increasing customer satisfaction and loyalty.

GEODIS has developed an integrated range of returns logistics services that combine new technologies, an international transport network and a well-established logistics expertise. We offer a turnkey and rapidly plugged solution that includes the return interface for the customer, the collection of the returned products, the entire identification and control process, as well as sorting, repackaging, restocking, or recycling. GEODIS offers a one-stop solution for optimized returns management and a flawless customer experience.

Do you have a project to adapt your e-commerce to your customers' expectations? Contact our expert Rafic EL ARIDI to find a solution together

 

 

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Author
Ashwani
NATH
Global Head of e-commerce
Global Head of e-Channel solutions and previously Global Retail Director for GEODIS. He records more than thirty-seven years of experience in the logistics sector. He is leading the design and deployment of new e-commerce solutions helping brands go D2C (omnichannel) and enabling a differentiating “Customer Experience”.
o Strategist, skilled in high-end exposure to e-commerce requirements and innovative solutions,
o Expert at streamlining and optimizing the overall Operational, Digital & Business development process for e-commerce brands to achieve online sales growth.

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