Opportunities or Catastrophes?

How your returns look to you will depend heavily on how you are already approaching their handling. Do you just toss them in the corner in the hopes that they’ll go away? Do you send them off and take whatever pittance someone will pay you? There are better ways to go about managing these returns…and getting more out of the process overall. You can take those returns and squeeze some value from the formerly unwanted items.

This is an opportunity to:

• Practice great customer service. Whether you see it this way yet or not, your reverse logistics arm is an extension of service after the sale. Your customer is unhappy, so you make it right. When you do it spectacularly, with little friction and a lot of speed, you’ve got a brand ambassador in the making.
  
• Increase transparency in your supply chain. For returns management to be successful, you’ve got to know where those returns are at any given moment. This is a great excuse to increase transparency between your departments and vendors.
  
• Upgrade processes and systems. There’s a good chance that your current system isn’t really equipped for the influx of returns that you’re seeing these days. It’s a normal growing pain for companies that are scaling. Now is the time to gather your data and use it to determine where to spend a little money so you can save a whole lot on returns.

Just because you take your opportunity where you can doesn’t mean that your reverse logistics efforts will immediately start to pay off. It can take time to get things just right, but at the end of the tunnel are proven benefits.

“Our investment in new processes and technologies was calculated to have an ROI of 7.5 months but was met in two months,” Stephen Fulghum, Device Logistics and Procurement Director for U.S. Cellular wrote in CIO Review. “Revenue recovery rates easily doubled in some cases, but in most cases saw no less than 10 percent improvement. Revenue recovery percentages continue to grow today as cycle times continue to lessen… [o]ur revised strategy and vision certainly enabled us to plan for the future, but as importantly, executing with excellence resulted in changing product returns from an expense driver to a lucrative, profit center.”

Even if your returns are a huge anchor around your neck right now, they can represent opportunities over the longer term. Just remember to take every chance you can to use them to increase your customers’ happiness while maximizing the value you can get from those returned items.

The post 3 Ways Returns Represent Opportunities, Not Lost Revenue first appeared on Smart Returns.

But what happens to your returns when you use a returns management company?

Your Reverse Logistics Team Working for You

There are lots of options when dealing with customer returns. That may be the biggest benefit of working with a company that specializes in reverse logistics. It can ensure that you have many avenues to handle the ever-flowing stream of merchandise that ends up back in your possession.

Some of the more common avenues include:

• Return to inventory as is. If that wrong-color shirt is returned quickly and still in its original packaging, there’s nothing that stops you from adding it to existing inventory right away. The faster, the better.
• Refurbish and return to inventory. Items that arrive DOA or have a particularly bad quirk can sometimes be salvaged by refurbishers. You’ll have to pay a bit extra to bring these goods back to life, but if there’s a healthy market for them, you may find you’ve recaptured a lot of value.
• Redirect to liquidators. If you just really don’t want to deal with returns, you can always have your returns management team package them up and send them off for liquidation. Other companies buy these pallets and then resell the individual items inside. Often, the pallets are grouped by item type, so all your electronics would be packaged with the electronics from other stores, too.
• Strip and recycle. Again, depending on what it is that you’ve sold and had returned, you may find a revenue stream in stripping your items down and recycling them. Electronics, in particular, contain a variety of materials that recycle readily. Not only will you get a little bit of money for the precious metals that come from your recycling effort, but you’ll also be able to brag about your commitment to the environment.
• Disposal. Ultimately, some items will not be salvageable because they’ve expired or are otherwise totally impossible to sell. It’s not always as simple as calling in the garbage collectors, though. Many products require special handling and disposal so as not to harm the environment.

The good news is that you’re in control of what happens to your returns. If you want to focus on long-term sustainability, you may opt to remain as green as possible and fix anything that’s fixable, recycle what you can of what’s left and carefully dispose of the balance. For companies that just want to move products out of the way and write the loss off, liquidation auctions are a quick and dirty solution to a problem that continues to plague the eCommerce segment.

The post What Happens To My Customers’ Returns After The Return? first appeared on Smart Returns.

With customers demanding more free stuff, from free shipping to free returns, and wanting a more transparent shopping experience, the time is coming when wide swaths of the eCommerce industry may crack and fall down. Because those online retailers that can follow a certain giant Internet retailer’s every move, you can be certain that things will only go from bad to worse for them until they find a way to keep their costs down, including the cost of transporting their goods back and forth from consumers.

Tempering Expectations

Leaders in the business community have explained that “keeping up with the Joneses’” as the main reason that online retailers have gotten in so deep. There’s some merit to this argument, though the Jones family this group is envying happens to have an incredible amount of capital backing it.

If your business is struggling to keep a hold on your costs while ensuring super customer approval, give these tricks for keeping your costs down a try:

• Enact minimums and maximums. Some people refer to this as “putting rails” on the thing in question, but regardless of what you call it, it’s a good strategy. For example, tell customers there’s no free shipping below a certain threshold and same for returns. You’re not taking back a $2 top and paying for the shipping. Figure out where your break-even point is and strictly enforce it.
• Try membership fees. Free shipping and returns? Sure. But it’s going to cost you. Increasingly, companies like GrubHub and InstaCart are creating loyalty programs that give the member a break on fees in exchange for a flat monthly charge. You can do this, too. Just make sure your numbers are on point or it could cost you a lot more than it saves.
• Invest in your catalog. Online or off, people want to know that what they’re getting is what they expect. Too often retailers skimp on things like product descriptions and images that give the shopper a complete picture.
  All that savings in production ends up costing a fortune in returns and the manpower to process them. Instead of getting the cheapest writers and photographers ever, invest more in your catalog and you won’t have to worry about free returns eating up your overhead.

Keeping costs down across the board should always be your goal, but with a view to the long distant future. It’s not enough to say “no more free returns” or “shipping isn’t included,” you have to figure out what’s causing all of these returns and then address it as well as you can.

Whether that means better product pages on your end or more buy-in from your customers in the form of membership programs, there’s a serious danger in eCommerce today. Don’t try to be a company that you’re not, because that’s doomed to fail. Instead, focus on your own customers and what they want and need from your relationship to help keep your costs down.

The post Keeping Costs Down In The Era Of Free Returns first appeared on Smart Returns.

Your people want to do better, as do you, but all the different shaped and sized packages and inconsistently labeled products make for slow going in your returns management department.

There has to be a way to make this easier and more efficient for all involved.

Overcoming Reverse Supply Chain Chaos

Although it might seem like your situation is borderline bleak, there are some ways to battle against the mess that plagues so many reverse logistics operations. Increasing visibility in your reverse supply chain isn’t easy, but it is possible with these tips:

1. Be sure your no-hassle returns policy leaves room for your associates to ask why the item is being returned. Not giving someone trouble when they’re returning an item is one thing, but failing to ask the right questions while you have the opportunity is another.

   There’s a good chance that the reason the item is being returned is because it wasn’t what the buyer expected in some way. It’s one of the most common reasons for a return, after mistakes made in product order fulfillment. Knowing ahead of time the reason that your product is coming home to roost will allow you to presort some packages before the boxes are even opened.

2. Provide return smart labels for each and every package that leaves your facility. While it might cost a little more to pay the return shipping on items that are unwanted, damaged or wrong, utilizing smart label tracking can save you lots of surprises in the reverse logistics department.

   Smart labels let you know when your package has been accepted by a shipper, who it’s from and, if your software is properly configured, what’s supposed to be in the box. This is the ultimate in transparency, giving your people a way to measure incoming volume before it arrives can help them better prepare.

3. Don’t skimp on the tech. Supply chain technology has come so far in the last decade that some companies can pinpoint the location of a single package that’s in transit from one coast to the other at any given moment.

   From connected long-haul trucks to product grading apps for use in the returns management department, there are plenty of tools to be had. You don’t need them all, but one or two that can do everything you need can provide the ultimate in visibility for your team.

Visibility in your supply chain is the key to improving your reverse logistics operation. In fact, if you’ve got the right kind of tools and procedures in place, your returns management team can do more in less time, potentially reducing your loss from those returned items they handle every day.

The post 3 Tips For Increasing Reverse Supply Chain Visibility first appeared on Smart Returns.

As it turns out, Illinois Institute of Technology professor Gurram Gopal and software engineer Alvaro de Miguel put their heads together to make sense out of those dollars, and where you’re best to put your Last Mile money in a recent issue of Supply Chain Management Review.

The Insights Your Supply Chain Demands

Dr. Gopal and de Miguel’s work on Last Mile supply chains may prove to be extremely valuable to companies both large and small.

Here are just a few of the things they found true:

• Limited delivery windows are mixed bags. Though these time windows greatly improve First Time Hit Rate, or the number of times a package is delivered on the first attempt, it really depends on where your package is headed whether time windows are an asset.Offering two-hour delivery windows within the city of Chicago is cheaper than base reference costs for the entire state, but they’re far more costly for the entire state. Because four hour windows cost more than 20 percent extra versus no delivery window commitment, you’ll see the best return using delivery windows within urban areas, where premium increases are minimal.
• Eco-friendly deliveries are best for long distance last miles. Plenty of companies are looking to go green for the last mile, especially when it comes to city driving.When vehicles that run on LPG, electricity or are some type of hybrid are involved, it turns out that eco-friendly deliveries just don’t make a lot of impact on last mile costs in urban areas. They did, however, have an impact when deliveries were all across the state of Illinois. For the city center of Chicago, cargo bicycles delivered a savings of up to 40 percent, even when time windows were offered.
• Wider adoption of security boxes and collection points can save you money. If a city or company were to promote the installation of secure boxes for every home that gets regular deliveries, it wouldn’t take long for the costs to be completely covered by Last Mile supply chain savings. With no time windows to consider, delivery costs could drop by around 25 percent. When collection points are the only delivery point, rather than individual homes, Last Mile costs could drop by as much as 50 percent.

Knowing more about your supply chain, how it functions and the differences in Last Mile costs between urban and more rural areas can help you save big money fast. Right now, many merchants are trying to find better ways to decrease their last mile costs, and data scientists are helping by modeling these questions to find the best solutions for everyone.

The post 3 Insights Into Your Supply Chain’s Last Mile first appeared on Smart Returns.

In this short amount of time, paper record-keeping has morphed into fully digital, up to the minute, automated series of data point recordings. The eCommerce supply chain is changing fast, in real-time.

A Few Tricks of the Modern Supply Chain

Of course, the many changes that the supply chain has experienced are largely attributable to tech that was designed to solve a single problem, but quickly showed potential to have more influence.

Take, for example, the simple smart label.

Smart label tracking is a great way to improve the customer experience, since they will always know where their return is as it works its way to the returns management team. But, as reverse logistics gets more and more complicated, tools like the smart label are also being used to help teams anticipate returns volumes and even pull the proper order information up prior to the item’s arrival.

Meet Industry 4.0

The smart label’s flexibility is child’s play compared to what the modern supply chain could do and become in the near future, according to Has-Georg Kaltenbrunner, VP of Strategy for Manufacturing at JDA Software.

This is his take on the future of logistics:

“Imagine a piece of metal that will eventually turn into … a part of a car body. That piece of metal has the capability, via a small identifying device, to negotiate its way through the factory and find the operation [center] that can do the job required. The piece of metal will tell a robot, ‘I’m becoming a Vauxhall model XYZ, … therefore you have to do this or that operation to me.’

“Similarly, on the transportation side, you then end up … with metal sheets that have been formed into the right shape for that particular car model and then the metal negotiates with the truck or lorry or vessel or air freighter and tells them, ‘Okay, I need to go to this destination on the other side of the country, so when do we leave? …”

“… the whole supply chain then eventually becomes self-steering and self-optimising. “

The Industrial Internet of Things

Each part of the supply chain is working through its own challenges on the path to that beautiful vision Kaltenbrunner sees. As these manufacturers, distributors, haulers, fulfillment centers and last mile haulers increasingly connect to the Cloud, they’re creating a second Internet of Things (IoT), nicknamed the Industrial IoT.

Like the IoT that supports things like home security systems and connected toasters, the IIoT is making it easier to do and see and control operations from anywhere in the world. It’s all in real-time, and almost as good as being right there on the ground.

The post All In Real-Time: The Modern Supply Chain first appeared on Smart Returns.

If you sell anything that requires informational labeling, it may be high time to consider something a little bit different: How about a SmartLabel?

The SmartLabel is Made for Smartphones

By scanning a QR code on the side of a package, customers can instantly access all the information that they could ever want about your product.

In this era of information-based sales over persuasion-based sales, the SmartLabel may well become King. You know shoppers are already Googling that information, this new type of label allows you to control the conversation.

With SmartLabels as a part of your marketing, you’ll be able to meet shoppers where they are, finally. Although a company that sells cosmetics, for example, isn’t required to disclose the ingredients in the same way food manufacturers are, making that same information available can be a goodwill gesture to people who may be on the fence.

It will be an enormous undertaking, that’s not a question. But, marketing to Millennials is a whole different kind of effort than marketing to their parents and grandparents. They’re tech-savvy and they don’t bother with sales pitches. Either they want the item or they don’t. Making the facts available online and focusing more effort on creating attractive, eye-catching and accurate packaging is going to be the key to maintaining a fruitful relationship.

SmartLabels Aren’t for Everyone

Again, the SmartLabel isn’t a mandatory part of the new law, this is just a good time to make major changes to your packaging since everybody else is going to be doing it. But these special QR codes are not for everyone. There are many cases where you may not want anyone to know too much about what you’re selling.

For example, if you’re less than proud of the ingredients in your cleaners, you may want to just keep on going and forget the QR code ever existed. The SmartLabel is designed with consumer transparency as its first priority.

Other manufacturers are concerned that because of the standard format that the data behind the SmartLabels take, their company branding will be lost in a sea of look-alike tabs. This is a valid point, but, remember, you got that customer to your package so you’re very close to getting that package in their shopping basket already. Your branding worked its magic, SmartLabel or no SmartLabel.

Customers’ are increasingly difficult to reach because of ad blockers, cord cutting and the fall of print media, but they still look at product packaging each and every time they go to the market. This is your big opportunity to connect with them on their level and meet them where they are. Sometimes all it takes is a QR code on a SmartLabel to make a lifetime customer.

The post The Connection Between Customers’ Behavior And Your Packaging first appeared on Smart Returns.

For the last several years, it has showed consistent year-over-year growth in the double-digit percentages. The 2017 holiday season alone grossed over $119 billion, a 16.9 percent year-over-year increase, according to US Census data. Unfortunately, what goes up must also come down, and what’s sold through eCommerce platforms does, inevitably, come back, often as much as 15 to 30 percent of the time.

Customer Returns Rising Faster Than Sales

As much as an expanding eCommerce retail sector is a great thing for 3PLs and customers alike, returns are becoming a major wrench in the gears of the machine. Returns that can’t be sold at full price (or at all) are costing retailers an average of 4.4 percent of yearly revenues and adding a not insignificant amount of pressure on retailers that may not have a lot of margin to work with.

Customer returns are increasing for a variety of reasons, including things like:

• A huge increase in eCommerce sales. As eCommerce continues to expand at a rate that feels almost unchecked, the sector is still finding its feet. Products aren’t always represented in their best light, which then results in unhappy buyers and the need for a reverse logistics team to send the items backward through the system.With time, this may decrease as both eCommerce sellers and buyers develop better communication strategies.
• Customers feel safe buying multiple things online and sending back the ones that they don’t want. Because it’s difficult to know for certain if the item you’re looking at online is exactly what you think it is in real life, many online shoppers have adopted the practice of purchasing multiple items or multiple sizes of a certain item and sending back the ones that simply don’t work.This trend is epidemic among clothing retailers, especially. The ultimate solution is to have a good returns management team in place that can assess the problem with the returned items and another team that takes that information and uses it to improve customer satisfaction with the initial purchase, eliminating the need to buy several items when only one or two are actually desired.
• Large discount retailers are expanding into eCommerce, making it easy for customers to return items to brick-and-mortar stores. When big box stores can offer customers easy returns at convenient neighborhood locations, there’s no reason for a customer to not take a chance on a purchase they may be uncertain about.After all, if it doesn’t work out, they can simply drop the item off on their weekly shopping trip. This element alone has driven an increase in customer returns, increasing the demand for reverse logistics across the board.

Customer returns continue to increase, especially for retailers with dealings in the eCommerce world, putting more demand on 3PLs and reverse logistics departments across the country. Long term solutions, like improving customer purchase confidence, need to be found to help contain this problem as the industry expands.

The post 3 Reasons Customer Returns Continue To Increase first appeared on Smart Returns.

When it comes to smart labels and smart tags, though, looks can be deceiving. These tiny, unassuming devices are growing in popularity among supply chains across the globe, but they’re not without issues.

As smart tags become more common, it’s going to be important that your returns management team is familiar with these devices. After all, they could save your business a lot of money.

Smart Tags: What’s Trending, Both the Good and the Bad

Like any young technology, smart tags aren’t perfect. These smart tags that offer features like real-time tracing, re-programmability and simultaneous identification have massive potential, but it will take some time for the supply chain to really figure out how to use them to their potential.

Here are some key reverse logistics label trend to watch:

• More applications in more industries are going to increase usage. Just a few years ago, smart tags were a barely recognized technology, but today they’re being put to work in retail, manufacturing, pharmaceuticals, healthcare, logistics, as well as the food and beverage sector. The more uses that can be found for these small and mighty devices, the better.
• Increasing disposable income of buyers is driving market growth. Shoppers with disposable income are increasingly going online to make purchases and they’re demanding to know where those purchases are as they work their way through the supply chain.Smart labels and smart tags make this possible, even allowing those buyers to track their packages with street level accuracy in some cases.
• Lack of consistent standards may slow growth on the global market. For all the great stuff coming out of the smart tag technology, it has a fatal flaw that has to be corrected for it to be a truly effective tool. There are no consistent standards across the globe.That means that smart tags used primarily in Asia may not be able to be read or used in North America, or vise versa. Once this is resolved, a lot of the paperwork issues that often slow down the international supply chain could be eliminated and the smart tag used instead.

Smart labels and smart tags are going to continue to be useful tools for reverse logistics and throughout the supply chain for the foreseeable future, provided that a standard can be established that all shippers and markets will conform to. In the meantime, they’re still a great boost to customer experience, allowing both your team and the customer to see exactly where their package is in the shipping process.

The post 3 Key Trends In Smart Labels, Smart Tags first appeared on Smart Returns.

If you find yourself in the same boat with your returns management process, there are some simple ways to get into the game without spending a fortune.

Improving Returns Management Technology Overnight

It might seem like a huge boast to claim you can make major upgrades to your reverse logistics facility’s tech overnight, but these days it’s not that far-fetched. Depending on how old your current technology is, your cost and time input may be fairly minimal. Data analytics will absolutely make returns management run smoother and will save you money over the long-term.

Try these tools to get started:

• Supply chain models. Sure, your experience has given you a pretty good idea as to what to expect out of your reverse logistics process, but every once in a while you still get thrown for a loop. Then there are the times when you wonder if you could be doing things more efficiently, but you can’t put a finger on what to change.Both of these scenarios can be better visualized and solved using supply chain modeling software. You can use this sort of software to simulate different situations, from disasters that close regular shipping routes to sudden influxes in incoming packages.
• Artificial Intelligence. There’s nothing wrong with regular intelligence, but adding a little AI into the mix gives you an extra brain to help with the heavy lifting.Your AI could be taught to crunch numbers, used to automate high-volume processes that require very consistent responses or put to work watching out for problems before they happen. Often, AI can fill in for the weaknesses in human intelligence, and human intelligence can do the same for AI. Adding one to your team makes for the best of both worlds.
• Software as a Service (SaaS) and Continuous delivery options. If you’re looking to overhaul your system entirely, there’s nothing that can touch on SaaS and continuous delivery for keeping you on the cutting-edge of returns management software updates.SaaS is a type of software that’s hosted on a rented server off-site, paid for on a subscription basis and managed by a team of IT professionals. Continuous delivery updates are still sent to your local computer, they’re just sent as the updates are available, instead of making you wait for a yearly system-wide distribution. Either will keep you ahead of much of the competition, which is a great place to be.

Big data is changing how reverse logistics and the entire supply chain functions in very significant ways. The best way to stay competitive is to stay on top of these emerging trends, since they’re likely to reduce reverse logistics costs by speeding up and automating the returns process.

The post Technology and Your Returns Management Process first appeared on Smart Returns.