For eCommerce retailers in the fashion industry, returns have been a challenge for some time.
With return rates as high as 30 to 40 percent in some cases, the entire sector has been searching for a better solution to a problem that threatens to bring them to their knees every day. Customers want free shipping both ways, but often order more than one size because they fully intend to send all but the best fit back, creating a reverse logistics nightmare.
How does a retailer begin to combat this kind of logistic challenge?
The Reverse Logistics Dance
If you’re suffering from the same kind of problem as so many other eCommerce retailers, it’s time to take a hard look at where you are with your reverse logistics.
Although about a billion square feet of warehouse space has been added to the supply chain in the last 10 years, the average age of these facilities has risen from 26 to 34 years over the same period. Most of these older warehouses are nether equipped, nor arranged or sized, to handle the sheer bulk of returns that eCommerce generates.
To add insult to injury, the labor force required to support such extensive returns processing simply doesn’t exist with unemployment floating around four percent. So, what happens next? Reverse logistics has to change substantially, especially those in-house teams that have been doing things the same way for decades.
Elements of the Best Returns Management Teams
Whether you’re outsourcing your reverse logistics or you’ve got a returns processing team of your own, there are certain elements that can speed up and keep your reverse logistics competitive.
These factors related to return management include:
- You have no excuse to be ignoring data points in a world where everyone has a computer in their pocket. Identify your KPIs (Key Performance Indicators), track them constantly and let your software help you learn where the problems and bottlenecks are in your reverse logistics process.
- Even though reverse logistics requires a careful eye and an ability to recognize a variety of items on sight, there’s a lot that can be automated. For example, smart labels will tell your team what is coming back to them and when to expect it. Other tools can help grade returns, speeding ready-to-sell items back into inventory and credits to buyers.
- Constant Improvement. With automation and data come the ability to re-envision the reverse logistics process in a way that leads to constant innovation and improvement. Your in house team or outsourced returns management 3PL should be willing and able to change their processes in response to data that clearly points to issues that slow down returns.
Clearly, there’s not a single way to approach the biggest challenge each eCommerce retailer faces today, but your logistics challenge can be simplified by creating a more flexible workflow based on data and tech. Are you ready to overcome eCommerce’s greatest logistics challenge?