Omnichannel is everywhere in the world of fulfillment, but when it comes to buzzwords, it still seems to be a fairly ephemeral concept.
DC Velocity, in conjunction with the tech research firm ARC Advisory Group, recently released its fifth annual survey on retail fulfillment practices, which included some interesting insights on omnichannel fulfillment and reverse logistics.
Because so many retailers have focused hard on their forward-facing logistics, without building out their reverse logistics at the same time, today’s mission for many is to scramble hard to get those returns management systems in place before all those different sales streams turn into returns at rates of up to 30 percent or more. This year’s survey drives that home even harder than anecdotes would have indicated.
Retailers Can’t Agree on Omnichannel
Some of the less surprising findings from the survey came when retailers were asked why they were interested in moving toward an omnichannel model. Increased sales (63 percent), increased market share (57 percent) and Improved customer loyalty (47 percent) came in as the top three reasons, only 12 percent of retailers responded with no interest in omnichannel.
What that omnichannel picture looked like varied a lot more widely, however. The top model selected was one where customers could order at the store and it would be fulfilled from the warehouse (52 percent), but allowing items purchased in store to be returned by mail (45 percent) and its inverse, returning items purchased online to the store (39 percent) as well as rebalancing inventory between stores as needed (38 percent) and fulfilling orders from different stores than where an order was placed (30 percent) were also contenders.
When it comes to returns, these very different ideas of omnichannel create a sort of chaotic dissonance that can make returns difficult to track.
No Idea How Returns are Impacting The Bottom Line
Perhaps the most alarming finding from the study were the answers to the question ‘Are you able to measure the financial impact of returns?’
You’d think this would be a high priority for companies who are largely running their own returns management teams (64 percent had in-house departments). Unfortunately, only 42 percent claimed to be able to measure the full financial impact of their returns!
Another 32 percent claimed they could ballpark it, and a full 27 percent admitted they really had no idea how returns affected them. In the age of Big Data, this is a disappointing trend to see. When 59 percent of the industry isn’t sure what, if any, losses its sustaining from returns, it’s no wonder retail is in so much trouble.
This is why it’s so important to work with an in-house team or a 3PL that can and will collect data for you to incorporate into your accounting. It’s vital to know if what you’re doing with both your forward-facing and reverse logistics teams is even worth the effort financially.