As eCommerce sales continue to grow, so do the number of returns with rates as high as 30%. For many eCommerce retailers, a high number of returns can seem like a problem. Reverse logistics are costly and time consuming. However, one of the alluring features of online shopping is the ability to return items if they don’t meet the customer’s expectations or needs. Online shopping, even with more recent advancements in augmented and virtual reality, still requires shoppers to buy without experiencing the product. Rather than seeing high online returns as a problem, eCommerce retailers can see it as part of how digital shopping works. Managing the returns process well is what can help contain costs and improve reverse logistics efficiency.
Here’s 5 ways to streamline your eCommerce returns management process:
- Focus on reducing return rates by improving product details. A large portion of product returns are due to insufficient product details in the description. eCommerce brands should beef up product descriptions with accurate details, photos, videos, and consumer generated content like reviews that help buyers make more informed purchase decisions. The more confident buyers can be about their purchases, the less likely they will be to return them.
- Make return policies obvious and easy. Studies show that 49% of customers check the return policy before making an online purchase. Further, 42% of shoppers say that “for a positive experience in online shopping, free returns are quintessential.” The customer experience depends not just on the checkout and fulfillment process, but on how easy they believe it will be to deal with returns. Again, easy flexible return policies lowers risk and increases customer confidence in their buying decisions.
- Gain real-time inventory visibility. Reducing returns and managing the reverse logistics process requires real-time visibility into your inventory. Reverse logistics is part of inventory management for coordinating restocking returned products to the warehouse, manufacturer, or store shelves. This requires a connected order management system to efficiently track all inventory.
- Reduce environmental impact. Since the pandemic, many retailers have switched to paperless returns, with a 60% increase in using QR codes instead of return labels. This not only reduces the impact on the environment by eliminating shipping labels, but makes the return process more convenient for customers who can use their device to scan the code and facilitate a return. Using QR codes has enabled retailers to gather more digital information on when, where, and why products are returned.
- Work with a reverse logistics partner. A major pain point for eCommerce businesses is that returns have peak seasons after major sales and holiday seasons. This spike requires the ability to scale up returns processing. However, online stores with limited staffing can struggle to do so without automation. This can lead to a higher cost of returns and a decrease in customer satisfaction. A reverse logistics and fulfillment partner brings the scalability, automation, and cost efficiency that most eCommerce stores cannot attain on their own. Reverse logistics partners have the technology, infrastructure, expertise, staff, carrier relationships, and automation to achieve more efficient returns.
What Role Does Automation Play?
eCommerce businesses often wonder whether they should consider implementing automation in their fulfillment and reverse logistics operations. While larger e-Retailers often have the operating capital to invest in robotic automation and other automated workflows, it may be more cost effective to work with a fulfillment partner that specializes in automated order fulfillment and reverse logistics. You may be wondering, how does automation improve the returns process?
In the big picture, automation can play many roles, all of which work together to improve reverse logistics. The following are common types of automation that a logistics partner like Radial employs in their services for clients:
- Workflow and process automation. Automating workflows and processes starts with data, application and system integration, which connects software and platforms to create custom workflows that streamline the order fulfillment and returns process.
- Analytics automation. Retail technology generates massive amounts of data that can inform the reverse logistics process, if that data is integrated with core systems. Analytics and business intelligence can be automated to detect, sort, and analyze data in real time for better decision making.
- Order fulfillment automation. Automating order fulfillment ensures that no detail is missed and that customers have a streamlined experience across the entire customer journey, including returns.
- Inventory management automation. Tracking inventory has become complex as retailers now serve as mini distribution centers and offer multiple store fulfillment options. A modern order management system will include real-time inventory visibility to track all inventory no matter where it’s located or going.
- Robotic automation. Robots now fulfill pick and pack with more accuracy, speed, and 24/7 capacity. Radial uses robotics in our fulfillment centers to provide our clients with advanced productivity and service level agreements to meet and exceed their customer expectations for seamless returns.
It’s important to note that robotic automation is not intended to eliminate human employees. It’s designed to remove rote, repetitive work from humans and free them to focus on higher value work — more suited to human strengths of empathy, judgment, problem-solving, and relationship building. Retail automation is core to delivering a modern order fulfillment and reverse logistics experience for customers.
From creating better return policies and designing customer experiences that limit returns to partnering with the right reverse logistics providers, there are many ways retailers can optimize their systems and processes to decrease costs while keeping customers happy and loyal.