Leaving the Returns to the Pros

Your customer-facing logistics are still running like a well-oiled machine, but every time a return comes in (which is happening more and more), your supply chain grinds to a halt to handle it. The problem is that unlike forward-facing logistics, where you’re working with fairly uniform things in a volume that you can better control, reverse logistics puts all sorts of things in front of you, packed in ways you might not expect and often in conditions that you weren’t counting on. In short, forward-facing logistics is the cure-all to reverse logistics’ screaming chaos. And chaos isn’t a thing you have time for.

This is just one reason to outsource to a returns management specialist, here are a few more:

• • Specialists are faster and better at grading returns and sorting them quickly. It’s not that you can’t do the job, it’s just that they can do it a lot faster because they’re using dedicated equipment in a facility that does nothing but returns all day long.

• • They have systems in place that make decisions based on fixed variables. There’s not such a thing as a hard and fast rule about which items are graded how; in a big facility, it’s determined by a combination of client input and a platform designed to use available information to more accurately grade returned goods. When your team is making value judgments instead of looking at data because you can’t justify the expense of these same platforms, you’re going to find a lot less consistency in how returns are graded and sorted.

• • Returns specialists know the right people to move your products where they’ll sell best. Depending on the nature of your returns, there are any number of people who are thinking about buying that very thing right now.
    Reverse logistics companies have relationships with refurbishers, liquidators, recyclers and others who can get your product out of the way and recapture some of the value that it originally held.

Recovering the most money and reducing the environmental impact of your returns are the end goals. If you can hire an outside company that’s capable of pulling enough value out of your unwanted items to pay its own monthly fee, then the whole eCommerce world can be your oyster.

The post 3 Reasons Why Outsourcing Returns Makes For Better Business first appeared on Smart Returns.

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.

As Goes Amazon Goes the World

Unfortunately, customers are growing increasingly used to the way Amazon does business. Even though it’s a behemoth in its sector, there’s an expectation that even small eCommerce stores should follow in its path. This is known as the “Amazon Effect” and it absolutely impacts everything in the eCommerce world, from how packages are shipped to how the supply chain handles reverse logistics. But Amazon isn’t the only force influencing the rise of free returns across the eCommerce space. These trends are also raising the stakes:

• In-store Returns. Ordering online once meant having to return products through the mail. For many retailers with eCommerce divisions, the cost and hassle of mailing things back has been replaced by free in-store returns. These free in-store returns also allow customers opportunities to see what’s new and what’s on sale in the shop, spurring more purchases.

• The Explosion of eCommerce. eCommerce isn’t perfect, sometimes the blue shirt that a customer thinks they’re getting turns out to actually be black, or worse, green!
  Not being able to inspect products in person means that products may fall short of expectations, necessitating a return or exchange. Of course, customers are quick to blame the shop for not giving them a better way to judge the item, but they will generally accept returns with free return shipping for their trouble.

• Customer Demand. Even before there’s a problem with an order, customers are demanding free return shipping as a prerequisite to purchase. According to a Dotcom Distribution survey, a third of customers will only buy if there’s free return shipping offered. More than 90 percent of those same respondents say that free returns is very influential in where they ultimately purchase.

Just like free outbound shipping was once high stakes, the idea of free returns shipping for everything is becoming a live or die issue for eRetailers. Customers seem to want to treat eCommerce stores just like those in the real world, where they can breeze in and out, sampling merchandise and returning almost anything without paying as much as a restocking fee (remember those?).

eCommerce retailers have to continue to do their very best to keep up with these trends. Even if you can’t offer free return shipping, many consumers are willing to pay a small shipping fee when there’s a lot of transparency involved and you move quickly to process their returns.

The post 3 Trends Pushing The Rise Of Free Return Policies first appeared on Smart Returns.

Reverse Logistics can be a Value Add

Plenty of customers will tell you that they won’t buy anything from an eCommerce store that doesn’t offer some form of free and fast returns. If your returns policy is confusing, that’s another big issue. Having clear, transparent reverse logistics, however, can influence the most discriminating customers. The bigger issue is how to make this additional expense work for both you and your customers at the same time.

You can be sure that returns work better by:

• Identifying customers likely to return items. It may feel awful, but many large eCommerce retailers are starting to invest in technology that can help them identify chronic returners.
  In some cases, these people have their account closed after a warning about their shopping habits, in others stores simply stop allowing free returns shipping to discourage chronic returners from sending so many packages back on the store’s dime.
• Including smart labels with every order. When you’re paying the shipping costs, you might as well make everything a little easier. Make sure every order comes with a smart label addressed to your reverse logistics facility. This way that team can be prepared for what’s coming each day. Flow control is challenging for returns management because products arrive in all kinds of conditions, even their potential volume is unpredictable. Smart labels speed up returns and credits, making everyone happier.
• Having disposal plans already in place. Even if you’ve never had to send products to be refurbished or recycled, it’s a good idea to have your returns management team cultivate those relationships now.
  Planning for disposal ahead of time will make sure that your products that can be sold bring top dollar, plus it’ll keep the mess in your facility to a minimum since you’re not waiting around for a contract before sending those unsellable items off.

Returns management is not only a big topic of discussion in the supply chain today, it’s also a way to build better relationships with your customers when it’s running well and includes a lot of transparency. After all, your customers are happiest when they know what’s going on with their orders, even if that order is on its way home to you.

The post 3 Ways To Make Return Management Services Work For You, Your Customers first appeared on Smart Returns.

Holiday sales tend to create a surge of product sales, followed by a tsunami of returns from gift recipients who would have preferred that shirt in orange or the higher powered flashlight that you also offer for sale.

The entire concept of holiday returns can be overwhelming, but you can navigate the reverse logistics it takes to survive.

Approach Returns Management with Care

Reverse logistics can be incredibly costly for companies that aren’t making it a priority.

Instead of being able to recover some amount of the cost of the product, it turns into a situation where it’s just cheaper to let returned items gather dust. Your next holiday return rush will be different, though, because you’re going to be more prepared and have a new approach, like the following, in place:

• Creating a dedicated returns team. It might seem like a big expense now, but when a holiday shopping season comes around again, a team that does nothing but reverse logistics can more than pay for itself.
  Instead of waiting until sales taper off to handle returns, your dedicated team can get those items back on the shelves while inventory is being sold rapid fire. That means more money for you and a higher return on products.
• Tracking returned items individually. Fraud is an unfortunate issue within the reverse logistics orbit. Although most consumers are honest, a few will try to game the overwhelmed system by sending low value items back in high value boxes or worse. Tracking can help you deal with these issues, but it’s also a great way to open up communication between you and an honest returner. They can see where their item is in the process, so they know when to expect a refund.
• Monitoring reasons for returns. The earlier you start monitoring the reasons given for returns on each item that comes back, the better off you’ll be. Since eRetail products are at a disadvantage because they can’t be tried on, held or generally examined in real life, customers have to make some assumptions to fill in their knowledge gap.
  If you give them the right information, they’ll do that successfully and love their orders. If not, you’ll see a lot of returns. Keep your eyes on the returns and audit any item that seems to be being returned more often than other products like it. This practice can help curb those expensive returns, so don’t wait any longer to get started!

Reverse logistics isn’t easy on a good day, there’s a lot to know and plenty of changing gears required to get the job done. Having a plan of attack in place before big holiday shopping seasons can help ease the pain, though. No matter how you intend to handle your next batch of holiday returns, the most important thing to remember is to keep your customers informed. This simple act can help create a customer relationship that lasts.

The post No Matter What The Holiday, Here Are 3 Approaches For Navigating Holiday Returns first appeared on Smart Returns.

Bricks and clicks clothing shops have equally troublesome challenges, causing many to close store after store in hopes of regaining profitability. Those retailers that maintain a presence in the eCommerce space are often working furiously to keep a foothold in their industry.

What’s an apparel company to do in these difficult days?

Turning Returners into Renters

The 30 to 40 percent return rate that many fashion eRetailers experience has been a serious problem for the entire industry.

Much of this is on customers who practice “bracketing,” a practice where the customer places an order for the same item in various sizes intending to try clothing on and send back what they don’t want. This is not an “if” kind of return, it’s a “when.” Coupling this practice with free return shipping has led to some serious cash flow problems in the industry.

But that may soon be changing.

Inspired by the success of Rent the Runway, a service that allows women to rent expensive clothing for events and return them when the party’s over, fashion retailers are testing the waters of clothing rental. Familiar names like New York & Co. and Express have started offering clothing rental for a monthly fee .

Turning Reverse Logistics into Rental Processing

New York & Co. has been forced to close 150 retail locations since 2012, according to reporting by Digital Commerce 360.

Clothing rental is one way that the chain can continue to engage their customers, even bracketers, on a regular basis without the additional financial pressure of dealing with return after return.

Instead, its reverse logistics team is busy repackaging those rented outfits for the next person. The same skillset and tools are needed, but because these items aren’t returned due to a defect, they can be moved more quickly from customer to customer.

If the customer happens to really like that pair of jeans or the kimono that they got in their rental package, they can then purchase it at a discount. Retailers can sell more clothing and handle fewer bracketed orders this way, making it a good solution to the cash hemorrhage that fashion eRetail can suffer.

Is Renting the Future of Fashion?

It may still be a while before renting an entire wardrobe is a common practice, but clothing rental does give the fashionistas among us a way to try the latest styles without having to commit to them right away.

Of course, if they love what was sent to them, it can stay as long as the subscription lasts, but in common situations where pants are cut funny or shirts aren’t the color expected, it’s no problem to swap them out for items that are much closer to perfect.

Being a cost that’s already anticipated, the eRetailer includes the shipping costs in the overall package price, potentially increasing cash flow that may have been sluggish in the past. Renting deals with the problem of chronic bracketing, too, which can be a big load off of eCommerce shops.

Like so many things in the Internet Age, clothing rental may not be the future of apparel, but it seems to be one future. Everything has a niche these days, even buying new jeans.

The post Why Renting May Be The Future Of Apparel eCommerce first appeared on Smart Returns.

WalMart.com got a total redo, from the ground up, then came the two-day shipping (which is now free without a membership fee) and now, an expansion of that free shipping into its third-party seller marketplace.

So much is going out from WalMart and its fulfillment centers that you have to stop and wonder, what’s the plan for the in-bound? Professional reverse logistics must be massive at a place like WalMart, where millions of different items are shelved and distributed by 4,700 stores, as well as by the website.

How WalMart is Doing Reverse Logistics

Walmart’s clearly got Amazon in its sights, but there’s a lot of catch-up if the big box store is going to be a real challenger to the internet retail giant.

This holiday season, however, WalMart’s game plan may generate some talk among those in the know. There’s a reason that approaching reverse logistics like WalMart is the gold standard, as the company is setting itself up to turn what most retailers consider to be a massive fail into a huge win with tactics like:

• Simplifying online returns. Walmart aims to make it easier to return something to the store via their website. It’s a simple click and print situation, where you only have to log into your account and report the item that you need to return for the materials you’re going to need to pop up. Pack it, ship it with the label and your credit comes easy as you please.
• Simplifying returns of WalMart items in-store. If you don’t trust yourself to get to a shipper with your labeled box, put that return into a box or mailing bag (depending on what you’re returning) and take it with you right to the store. The WalMart associate will take it from there. In-store drop-offs are clever because people do tend to buy new things when they’re making a return.
• Expanding in-store returns to WalMart Marketplace items. There’s nothing like getting a great deal on a marketplace platform only to find out that it’s not really what you expected or it arrives DOA.WalMart is approaching this with a unique idea: accepting the return on the seller’s behalf. So, along with the fees that a Marketplace seller pays for basic access to the customer base, they can also opt for WalMart to return their items to inventory as part of normal returns management activities. It’s great for customers and for the sellers involved.

No matter how big or small your operation is, you can approach reverse logistics like WalMart. The secret is reducing the friction for your shoppers by making returns as easy to make as purchases. Those returns are going to happen regardless of your actions, you might as well use them as opportunities to provide excellent customer service and win customer loyalty.

The post How To Approach Reverse Logistics Like WalMart first appeared on Smart Returns.

For online retailers, as much as 30 percent of your sales may ultimately come back. There’s no single solution to help slow the bleed, but you can make the best of your returns management and focus on how good reverse logistics pay you back right away.

Customers Love Good Reverse Logistics

Returns are inevitable, so you might as well use them to build a stronger relationship with your shoppers and inflate your reputation as a business that’s easy to work with.

According to ComScore, about 63 percent of customers review your returns policy before making a purchase. If your policy is lacking, or you’re lacking a policy, it can spell disaster. But, for brands that have customer-friendly returns policies, these are a few of the ways they can pay you right back:

• Improving customer goodwill. The customer experience is everything these days. After all, your products are likely also sold by other vendors, so you have to have something extra that makes people want to use your business above all others.Giving customers a good experience by throwing in little things like smart labels or instant refunds can be a huge thing, even enough to create lots of enthusiastic brand ambassadors.
• Fueling future purchases. Any time a shopper uses a new shop, they’re hesitant, especially if the vendor is more clicks than bricks.If your first order doesn’t go exactly as planned, but you make it right quickly and with no roadblocks, those customers will be more comfortable buying from your shop in the future. And they’ll tell their friends that you can be trusted. It’s a big deal for a little reverse supply chain magic.
• Getting products back to resell. When your returns policy is easy for the customer, you can count on recovering more money out of each item that’s being returned.Items that arrive back at your facility in perfect condition because they arrived in the wrong color, for example, can immediately go back into inventory, giving you another chance to sell them for full price. Items that aren’t as perfect will still recover more of their value the sooner they’re sent back to you because they’re still in style and up to date.

Good returns mean good business and lots of goodwill between you and your customers. If you don’t have a dedicated reverse logistics team, there’s no time like right now to add one to your supply chain. Your favorite 3rd party logistics companies often offer returns management for less than you would pay an in-house team and they’ll handle those returns per your specifications without having to be trained from scratch.

The post 3 Ways That Good Returns Pay You Right Back first appeared on Smart Returns.