With the explosion of online sales, returns management is becoming vital for e-retailers. In addition to being a commercial argument, reverse logistics allows retailers to reduce the downtime of items. Here are some tips to optimize your logistics.
According to the results of a survey published by GXO in August 2021, 42% of consumers say they have already returned a garment online. This trend has not escaped the attention of retailers, who are increasingly taking the logistics of returns very seriously. According to the same survey, more than a third of retailers say that online returns have increased in the last 12 months. 72% of retailers have even invested in their returns management processes, which include after-sales service, recycling, repair and refurbishment activities. "Over the past three years, consumer habits have changed. Customers are used to buying multiple products and returning them. Since March 2020, this return volume flow has exploded following the doubling of online sales," explains Vincent Torres, CEO of Revers.io, a company founded in 2009 specializing in e-commerce return issues. To be fully satisfied, consumers also want to be reimbursed quickly, between three to five days maximum. So many constraints that retailers have to face. Indeed, receiving returns, checking them, putting them away and storing them before putting them back on sale requires numerous manipulations and mobilizes operators who travel long distances. "Managing a return represents a fairly high cost, at least 10 euros per item," says Pierre-Yves Minarro, deputy general manager at Scallog, a specialist in robotic solutions for distribution logistics. Reducing the costs and logistics challenges of the current wave of e-commerce is therefore becoming a priority for brands.
Amazon was one of the first players to offer 30-day returns and try-before-you-buy on its apparel. This is forcing its competitors to match the same level of service, offering consumers the ability to order multiple items, try them on, and only pay for the clothes they want to keep. "This is becoming fundamental for retail players. To build customer loyalty, you have to manage product returns quickly and simply and provide transparency," says Vincent Torres.
Giving customers a choice
How to do this and how to optimize return logistics? To give full satisfaction to consumers, you must first give them the choice of return, and above all not impose it. "Some people want to pay for home pick-up, others for a return to a store or a post office," advises Vincent Torres. The next step is to offer the most intuitive solutions possible to further engage consumers and improve their overall experience. According to a 2021 State of Retail Mobility report published by Soti, two-thirds (64%) of French consumers say they would buy more if it were easy to return goods. Customers increasingly want to return their packages online or in-store, get information over the phone or on an interface, download their return slip to their phone or computer, track their return via email alert or SMS... All in an accessible and understandable way. "The customer wants everything at their fingertips, to do everything themselves. They want to control their returns and refunds themselves, and to be notified with the same regularity about the processing of their return file as they were when they purchased it, much like Amazon does," says the founder of Revers.io. Once the product is dropped off, the return system lets people know that the product has been collected and that the refund will be made. "This is how the repurchase rate will increase. We need technology that tracks and automatically triggers actions," adds Vincent Torres.
Acting as fast as possible
For e-retailers, the technology will especially allow a speed of execution and an industrialization of processes. The increase in e-commerce sales volumes has generated such a significant volume of returns that we need to industrialize returns," says Vincent Ricci, director of development for France at GXO, the leading pure-player contract logistics provider. We are currently recording between 15 and 25% of returns for our ecommerce customers such as Sarenza. To meet the expectations of its customers, including a major fashion e-tailer, the group deployed an automated solution to manage high volumes in reverse logistics that integrates several technologies, including a state-of-the-art mechanized sorting system, to handle flows of up to 12 million returned products per year. Eight automated sortation lines for apparel and one line for footwear are integrated with contactless scanner technology. The cameras on the scanners use machine vision to read color codes instead of barcodes, speeding up the routing of sorted products onto conveyors based on their condition: ready for checkout, damaged or to be returned for sale.
Optimize putaway processes
As for physical restocking, which requires travel and therefore time on the part of operators, one tactic to implement is to create dedicated areas for returned products. The French company Scallog, which has equipped several Decathlon sites, has developed a system of robots and multi-reference shelves. These shelves, which provide a multitude of different sized locations to store rollerblades, a T-shirt or a pair of socks, are placed by the robots in front of the operator in order to replenish the stock or to carry out picking to prepare orders. "This principle makes it possible to prioritize the shipment of returned products during a new order, to bring in the items very quickly and to sell them very quickly because stock costs money," explains Scallog's general manager.
While returning products sells, the environmental impact can be considerable.
Because returns also mean pollution: more boxes, plastic bags, other packaging, not to mention the carbon footprint of shipping goods. "Retailers can differentiate themselves by making sure that the packaging is used for both receiving and shipping. Packages, made of cardboard and not plastic, must be easily opened with a pre-cut so that it can be sent back with a return label," says Pierre-Yves Minarro. The existence of an environmentally friendly returns program will therefore become an important factor when shopping online.
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