Each year in the United States, the return of goods purchased for the holidays usually peaks on one day in early January; the volume is so significant the day has been designated National Returns Day. This year, due to an increased number of e-commerce purchases, retailers and shippers will experience National Returns Week.
How National Return Day Became National Returns Week
Retail e-commerce had its highest quarterly revenue in history, surpassing $220 billion between April to June 2021. As online sales continue to grow, so do returns. Approximately 30% of online orders are returned compared to returns of 9% for store-bought goods.
Consumers now practice “bracketing,” or ordering multiple sizes and styles and returning whatever doesn’t fit. Clothing, shoes, accessories and bags account for 48% of returns. The returns segment of the e-commerce industry is rapidly becoming a key part of the customer retail experience.
How do returns impact retailers?
For retailers, on the parcel side of ecommerce, one of the largest inbound shipments is returns, with a volume of 10% to 35%, according to Erik Caldwell, President of Last Mile Delivery for XPO Logistics. Returns are labor intensive and expensive for both retailers and logistics companies and cost retailers an average of $10 to $20 per return before adding shipping costs.
A third of retailers say dealing with returns has impacted their profitability as returns are ultimately their cost to carry. The logistics of transporting and warehousing returns is a necessary evil for retailers aiming to satisfy and delight consumers.
Returns Made Easier with SaaS Platforms and Technology
According to Allied Market Research, the returns market is forecast to reach $822B by 2025. In order to keep their customers satisfied, retailers will need to deliver a great customer experience while also keeping an eye on their costs. Automating returns in the final mile will drive efficiency and help reduce costs.
Predictive SaaS logistics platforms can manage the returns process by integrating returns with the delivery process, reducing the amount of extra trips for return pickups. Visibility, communication, and transparency are the keys to the returns process for all stakeholders.
How can visibility and communication improve the returns process for retailers, shippers, and consumers?
Visibility in returns is just as important as it is in the delivery process. Knowing a return’s location in the supply chain is important to both retailers and their logistics providers. Returns begin a new chain of custody for the goods. When the returns process is automated, as with deliveries, stakeholders can track their return goods in real-time. Potential issues can be mitigated and managed when retailers, dispatchers and drivers all know exactly where a return is located.
Visibility and real-time communication are also important in creating a pleasurable returns experience for the end consumer. Returns need to be as seamless to the end consumer as the delivery process is. Consumers want to know where their returns are and when they will receive their refund from a retailer.
Self-service slot booking for returns with flexible pickup windows improves the consumer experience. Platforms offering secure and seamless communication with drivers through driver apps and dynamic routing can offer these pickup windows to consumers, further enhancing the customer experience and contributing towards brand loyalty.
How does transparency play a role in returns?
Accurately tracking returns back to the correct customers is very important in reverse logistics. Brand loyalty can be impacted by one bad delivery or return experience. Keeping consumers informed about where their return is through real-time data and automated SMS messages helps keep them satisfied. Real-time transparency, such as knowing where and when a return pickup can be scheduled, will give consumers a sense of control over the returns process.
Final mile delivery and customer experience have been the focus of e-commerce as it continues to grow and flourish. That same concentration will need to be applied to the returns process. A smooth returns process is critical. Making both deliveries and returns more agile in the final mile is key for customer-obsessed retailers.
Visibility, Transparency, and Communication: The Final Word
Innovative technology and enhanced partnerships between shippers, logistics providers, and tech-enabled platforms can help provide solutions that offer fast, free, flexible, and sustainable returns to consumers and low-cost, resource-light processes for retailers. Dynamic routing and optimization can increase capacity utilization for fleets carrying less than a full load to take on return deliveries. Each of these technology solutions will enhance the returns process by increasing speed, lowering costs, and maximizing flexibility. Making both deliveries and returns more agile in the final mile is key for customer-obsessed retailers.
As the CEO, Kushal Nahata is responsible for driving the vision, strategy, and growth at FarEye. A dynamic leader, Kushal drives the culture of ‘customer-first’ at FarEye which enables the team to deliver value to FarEye’s 150+ clients globally. He is an effervescent thinker who is passionate about enabling digital transformation in the logistics industry and making it customer-centric. He is constantly working towards empowering companies to champion operational efficiency and customer experience.
Under his leadership, FarEye has achieved an impressive growth rate with rapid geographical expansion. Kushal enjoys training budding entrepreneurs and guiding them through their journey. He has been mentioned in the coveted 40under40 list by Business World and The Top 25 Software CEOs of Asia for 2020 by The Software Report.