The management of online returns has become an essential process in the consumer experience. If before, the customer focused their concern on the delivery conditions of their order, now they also value a potential purchase based on the returns policy. This is one of the logical consequences of the growth of e-commerce in recent years and the consequent increase in reverse logistics activity, which is already forcing brands to implement firewalls against the impact of returns.
The scope of returns is so significant that they already account for between 20 and 30% of e-commerce sales, with a value of €900 billion annually between Europe and the United States. The large figures are undoubtedly surprising, but what are the root problems in return management? As a starting point, an efficient reverse logistics operation should address, at least, these five problems:
- Misalignment of interests. As in many other sectors, the lack of aligned interests among all the actors involved in a process is counterproductive to a common goal, which in the case of returns is the final customer experience. If the interests of the involved actors are not aligned, delays and inefficiencies in product management can occur, ultimately impacting customer satisfaction.
- Silos of actors. Reverse logistics management requires a more holistic view of processes. Connecting all actors - carriers, customers, e-commerce, external 3PL operators, etc. - should be a priority in its management, particularly in a phenomenon like returns, which involves a dispersed and complex network of actors. This encompasses establishing a more collaborative organizational culture and implementing more fluid communication systems
- Unstructured information. Returns are the main reason why buyers contact customer service. Among other aspects, this first and foremost indicates an underlying problem, which is information-related. A clear and precise return policy acts as a good barrier against poorly managed returns. In terms of information, managing returns involves handling large amounts of data - product categories, dates, reasons for return - so it's important for brands to have tools that allow them to structure information and leverage its value. An example of this, without going any further, is the iF returns platform, which offers a logistics control solution where all this valuable information for brands is centralized.
- Lack of visibility. During the years of e-commerce growth, direct logistics has received much more attention than reverse logistics. However, the consequences of returns have increasingly taken center stage. Moreover, returns had become one of the main causes of economic losses and product fraud in online commerce, causing evident harm to brands' profitability. Now, improving product traceability and monitoring the status of returns, in addition to preventing possible bottlenecks, offers brands the opportunity not only to efficiently manage returns but also to turn the process into a competitive advantage.
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Complex supply chain. Seen as another step in the purchasing process, returns have the perception of being a tedious process that consumers are demanding about. So much so that 92% of customers would not repeat business with a brand that failed in handling returns. It is also a fact that the reverse logistics chain is complex. And expensive: logistics costs range between 8 and 12 euros per return. Therefore, managing returns requires comprehensive solutions that encompass the entire operation.
In the face of this scenario, there is only one alternative: comprehensive and specialized return solutions. That's why at iF returns, we offer the possibility of transforming returns into exchanges and new sales through our platform, centered around three key pillars: a customizable returns portal, optimization of logistics control, and revenue retention. Want to know more?