Challenges of Reverse Logistics and Creating a Streamlined Process

By Jessica Ip | 13 Aug 2019

How do you balance rising consumer expectations with what’s strategically possible for business when it comes to returns?

With the growth of online shopping, it has become vital for retailers to offer customers a returns solution as a way to remain competitive and provide a seamless customer experience. The reverse logistics market in Australia is not as advanced or mature as other markets such as the US and UK – so our retailers still face a myriad of challenges.

The online returns offering has created a demand, and sometimes an expectation, that retailers offer free returns. However, battling the consumer perception that returns are free is a challenge faced by all parties. Somewhere down the line, someone is responsible for paying these costs, whether it be the retailer, carrier or consumer. The reverse logistics market also brings further operational, financial and process challenges for retailers.

Forward logistics can be understood as a planned and scheduled delivery of products to the consumer, while reverse logistics activity is delivery in response to consumer actions to a purchase – creating operational and processing challenges for retailers. In reverse logistics, products come back at any given time in various conditions which may or may not come back with packaging. This adds another layer of complexity for staff when processing online returns as someone must individually sort items before deciding whether it will go back to inventory, be returned to a vendor or be liquidated.

Prior to the handling and processing stage of returns, extra warehouse space is needed by retailers to store customer returns. For small online retailers, this may be more challenging financially, compared with larger retailers who can afford to absorb these costs. Additionally, products that make their way to the reverse channels often remain there longer than in the forward channels. This affects a retailer’s bottom line, as it results in potential loss of revenue due to a product not being back in inventory, and higher costs in warehousing and transportation.

It’s important for retailers to create a streamlined returns process that isn’t complicated and doesn’t create barriers for customers. An omni-channel customer experience – particularly for retailers who have a store and online presence – increases customer loyalty to a brand and their chances of repurchasing. For instance, a retailer that allows returns at any store location regardless of where the purchase was made (online or at a different store location) is more likely to influence purchasing decisions, promote repurchasing and increase customer brand loyalty than one who restricts their returns conditions – such as only being able to return online. While it leads to greater difficulty for retailers to coordinate returns from a variety of different locations, it enables the customer to have just one touch point rather than multiple.

At CouriersPlease, we’ve launched a new service accompanied by an intuitive web portal for consumers to process self-service returns. Boomerang Returns enables e-tailers to offer their customers easy and low-cost returns for online orders. Partnering with returns solutions that can simplify the process, such as Boomerang, is beneficial to retailers and their customers alike. Customers will have an easy solution for returning their orders, whereby their unsuitable online shopping gets collected from their chosen drop-off point by a CP driver. This makes it easier for retailers as well, as CP is able to consolidate returns at its depot and funnel it back to the retailer’s warehouse in one movement rather than multiple individual trips. Looking to returns solutions such as these will help overcome many of the challenges in reverse logistics.

For more on the power of returns and the benefits of Boomerang, you can download CP’s free whitepaper Returns: The Competitive Advantage here.

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