Supply Chain Returns: Strategically Handling the Post-Holiday Rush

Ryan Borgerding | 13 January 2021

With the hustle and bustle of the holiday season now over, many would think that retailers and manufacturers could catch their breath and start to focus on the next season. However, all retailers and online businesses know that there is one more hurdle to cross before closing out this season and that means processing returns! 

In the supply chain world, returns processing is a part of the reverse logistics market, and businesses cannot afford to ignore this segment, as it is projected to reach $603.9 billion by 2025. This exponential growth directly correlates with the boom in online shopping, which only appears to be accelerating.

As online businesses seek consumer loyalty, a positive online shopping experience for consumers is paramount. That experience doesn’t just include a competitive price and quick delivery; rather, it must also include a customer friendly return policy.  A customer support survey completed by Bizrate Insights for Internet Retail found that “89% of online buyers say return policies influence their decision to shop with an e-retailer.” Adding to that, a Narvar consumer report found that 62% of surveyed consumers said they “would buy again” from online retailers offering free returns.

While the opportunity exists to unlock additional profitability and value, handling returns is not exactly easy. This is made clear by recent reverse logistics surveys, which revealed that every company manages returns differently.  If this is the case, what are some of the keys to effectively setting up your organization to manage returns to drive customer loyalty in a profitable way? 

3 Key Thoughts for Strategically Managing Returns

1. Easy return process

The returns process should be quick and easy for the consumer, while driving efficiency for the organization. This starts with the web interface to initiate the return.

The interface must be intuitive and readily accessible to initiate the returns process. This interface should also develop a return label that is placed in or on the original packaging to allow status tracking of the returned item. This small step creates visibility for the consumer and for the business.

Internally, an accompanying warehouse management system (WMS) will give you control to avoid inbound traffic bottlenecks and appropriately route products upon arrival. This also provides your customer service and support team the confidence to accurately report updates and guide customers as needed.

2. Efficient processing

Customers are looking for confirmation that the returned item has been received and that the credit to them has been completed. Eliminating lags in process reporting will increase customer satisfaction and the likelihood of return customers. 

On the business side, faster processing allows for the item to be quickly moved from returns into inventory for order fulfillment. Quick assessment of the return situation and product condition will help expedite decisions and product movement. This means generating revenue faster and more efficiently.

3. Effective automation

Effective automation of the returns process within the warehouse, starts with identification of the returned item and evaluating its status. 

While this evaluation process is typically manual in nature, it can be optimized:

• By providing adequate processing space
• Utilizing scanner identification of the item
• Creating a selectable disposition of the item

Once the disposition of the item has been selected, it can be placed onto the automation for sortation to its inventory location.

The last thing you want is for valuable product to stay sitting on the sidelines longer than necessary. Or, to reintroduce a damaged product to order fulfillment that will risk future customer satisfaction. Streamlined and organized pathways for processing are crucial to both current and future customer satisfaction.

Good Customer Experience to Unlock Profitability

Clare Muscutt said it well – “Building a good customer experience does not happen by accident.  It happens by design.” The impact of returns is a large challenge for all businesses today and while every company manages returns differently, these three key focus areas will help you manage returns efficiently and ultimately build strong customer loyalty, the underlying goal of most businesses. Surveys show time and time again that the impact of a positive returns experience is too valuable for businesses to neglect.

Bastian Solutions has assisted many clients in developing supply chain strategies that include returns processing.  Whether you are looking for an assessment, design of a new system or implementation, let us help you unlock profitability and customer value for your organization.

Author: Ryan Borgerding