5 Steps to Optimize Reverse Logistics and Product Returns
The buying experience has completely evolved now that consumers can purchase almost anything online, creating record-high online purchases globally. However, there’s a hidden cost to this progress – something retailers need to pay close attention to as the digital commerce trend continues.
While online sales continue to grow, so will returns. In 2020, we saw a 6% increase in returns from online purchases, estimating more than $761 billion of merchandise flowing back to retailers. Forbes list these key reasons why businesses were experiencing so many returns:
- Incorrect fit
- Damaged or defective
- Description mismatch
- Dislike product
For decades, NXTPoint Logistics has partnered with many diverse businesses, providing comprehensive reverse logistic solutions designed to overcome challenges such as transportation, recycling damaged items, and warehousing and distribution services for returns. To help you navigate the online marketplace and product returns, here are pivotal actions every retailer should take to manage supply chain flow:
Design a Return Policy That Works for Your Business
The return policy is one of the most important aspects of online sales. Consumers are more inclined to shop with you when they have options. Design a creative return policy that builds customer trust, offers convenience, and meets buyer preferences.
Incorporate these elements to ensure customers shop with confidence.
- Flexibility – offer multiple return options, such as in-store returns and pick-up services for bulky items.
- Clear Communication – ensure your return policy is easy to find and understand.
- Personalization – tailor your return policy to different products, such as furniture or clothing.
- Customer Support – offer on-demand customer support to assist with returns.
Get Creative With Your Return Strategy
There are alternative strategies to consider with returned products that align with your company’s values, brand, and goals. Including sustainable, flexible options in your return policy is a unique approach to designing a customer-centric strategy.
It’s common for retailers to have generous return programs. Companies are willing to subsidize returns to build brand loyalty or encourage consumers to donate their items after providing a refund. Not having a return policy can work for one-of-a-kind products or garage sales but will likely prevent future consumer purchases. Limit cost, save time, and fuel customer loyalty with return policy strategies such as these:
- Boris Model – buy online, return in-store
- Just Keep It Model – online shoppers receive purchase refund and are permitted to keep inexpensive or large items
Product Care for Returns
Maintain the highest standard of care when processing returns. The returns process presents an opportunity to inspect items thoroughly, clean and refurbish them as needed, and ensure they are in perfect, like-new condition before being restocked for resale. This meticulous approach is essential for consistent quality and customer satisfaction. By investing in the utmost care and attention to detail throughout the returns handling process, businesses can protect their brand, reduce product waste, and guarantee positive customer experiences.
Align Inventory Levels With Your Return Strategy
The adage – too much of a good thing – can apply here. Flexible warehousing is essential in effectively managing product returns. This additional space can enable you to control inventory levels while ensuring there’s dedicated space to accommodate and organize returns. By having a 3PL partner with warehousing flexibility and the innovation to provide end-to-end visibility, retailers can streamline returns management, making it easier to redeploy back to your returns center or to a new buyer.
Simplify Returns Shipping
The logistics of arranging pickups, coordinating with carriers, and paying for individual shipments can quickly become a costly venture. Solve this issue with consolidated shipping that leverages full-truckload transportation. Rather than dealing with single product shipments, your 3PL logistics partner can help you store all returns in a centralized location and then consolidate them to ship via single truck delivery. This strategy presents discounted freight rates compared to individual shipments and improved efficiency as your logistics partner coordinates storage and transportation arrangements.
As digital commerce continues to grow, so will returns. The type and quantity of goods, commercial warehouse location, order fulfillment, distribution processes, and costs are vital components retailers should consider when mapping a logistics plan that effectively supports their return policy.
Partnering with a 3PL company like NXTPoint Logistics, you can access a diverse menu of global warehouse solutions featuring comprehensive warehousing distribution, replenishment support, and reverse logistics that pair well with any return strategy.
Learn more about our flexible reverse logistics solutions.
