The Point of No Return – How Reverse Logistics Is Changing the Game

With Klarna, a Swedish e-commerce payment service for online shoppers, landing on our shores, we can’t help but reflect on the potential impact on reverse logistics. The ‘buy before you pay’ concept, where consumers pay after delivery and only if they’re happy with the purchase, is likely to have a significant impact on the shipping and logistics worlds.

In this article, we look at the changing role of returns management and what it means for e-commerce traders moving into 2018. Historically, the business of shipping products in reverse was fairly simple: customers returned goods because they purchased the wrong product, the goods were damaged or defective on arrival, the product did not match the description or they simply did not want the product.

Today, the most common reasons for customers returning parcels are because they simply changed their minds, ordered more items to qualify for ‘Free Delivery’ or they ordered several items with direct intent of returning a few anyway (the latter is a common practice particularly in fast fashion where return rates are on average 50%). However, this is an industry-wide challenge. Research by Invesp reveals that returns from online purchases are 3 times that of purchases made in-store.

Overall the statistics are staggering:

  • Returns management costs businesses 8% of their total sales
  • Returns from online purchases cost UK retailers £20bn a year
  • 67% of consumers check the returns page before making a purchase
  • 58% of consumers want a hassle-free returns policy
  • 79% of consumers want free returns
  • 92% of consumers will purchase again if returns are easy

Faced with high consumer expectations, reverse logistics can no longer be managed as an afterthought–it requires modern solutions. As e-commerce sales continues to grow, so will returns, and businesses have to find ways to absorb the costs. Web-based carrier management software like SmartConsign introduces a simpler way for retailers, resellers and 3PL’s to have clarity in the process.

Simplifying the shipping logistics process ultimately means only one thing: improved customer experience (CX). Research shows that 83% of logistics professionals say that CX is a company-wide goal ‘and, they’re feeling the pressure to improve it’. And whilst legacy suppliers and technologies may have served them well in the past, it’s time to rethink how shipping should be.

“Current technologies are not addressing CX needs in retail supply chains. Only 3% said their current systems fully support efforts to improve CX, while more than 66% said existing systems do nothing to improve it.” Source: eft Supply Chain & Logistics Business Intelligence

Managing a disrupted shipping supply chain, and the growing power of omnichannel customers is a lot easier with smart cloud-based technology. SmartConsign is designed to help simplify the shipping process, putting the shipper in control of the experience, from warehouse to doorstep. The benefits are limitless:

  • Disaster Recovery Solution
  • Same Day Booking Portal
  • Smart Invoice Inspector
  • Parcel Tracking
  • Standardised Label Formats
  • Cloud Storage
  • Address Updates
  • Real Time Information
  • Cost Control
  • Drop Ship Label
  • Returns Management

The inevitable conclusion is that businesses need to treat outbound and reverse logistics equally.  Are you ready to jump in both lanes? To learn more about how SmartConsign multi-carrier management software can help deliver operational efficiencies and help achieve your company’s customer experience goals, get in touch today.