The Reverse Logistics Landscape

Returns can make or break an e-commerce business. Proprietary research from USPS Delivers, conducted with Provoke Insights, reveals valuable tactics for creating a functional and competitive reverse logistics plan.

Read the highlights below, then get the full slate of insights to see how your business can create a streamlined and successful return policy.

Use Technology to Enhance Your Reverse Logistics Process

Today’s customers want to return items quickly, easily and for free. These demands put a strain on logistics teams at e-commerce companies of all sizes.

To create a positive return experience for the customer in a way that is effective and efficient for the company, businesses need to tackle the challenges that come with processing returns.

USPS® recently commissioned Provoke Insights to conduct a proprietary study into the e-commerce reverse logistics landscape.

32%of surveyed companies cited manual labor tasks, including reworking, repacking and relabeling, as the biggest challenge to returns.1

After identifying what isn’t working in the returns process, turn to technology. Implementing the right hardware and software can relieve time-consuming manual tasks that slow down the productivity and efficiency of fulfillment employees. More than two-thirds (67%) of companies are already improving their logistics processes with technology.2

Research indicates that these four technologies provide opportunities to enhance and optimize your returns process.

  1. 1

    Automatic Data Capture

    Identify a returned object and gather important data about it without ever opening a package by using scannable barcodes or RFID tags.

    44%of surveyed companies use
    automatic data capture.3

    Primarily, automatic data capture cuts down the amount of valuable employee time spent opening a package, identifying an item, logging the reason for return and deciding where that package goes next.

    When a customer initiates a return online, they can note why they are returning the item. Then, a specific barcode is generated for their return label. Back in the warehouse, a team member can simply scan that code to see if the item is damaged and ineligible for resale or if it was simply the wrong fit for the customer.

  2. 2

    Cloud Computing

    Log and store valuable information about each return—such as the type of return, status, and more—in an accessible shared space.

    37%of surveyed companies
    use cloud computing.4

    The cloud is, in short, internet storage. Rather than managing reports and data on a local computer or server, which requires timely back-and-forth between a network of internal and external stakeholders, businesses can use the cloud for faster and more efficient visibility.

    Most cloud-based management applications also incorporate some level of live editing, meaning stakeholders can see logged updates in near-real time. It also opens the door to better collaboration with partners and broader visibility across the supply chain.

  3. 3

    Predictive Analytics and Big Data

    Discover insightful patterns through data analysis that can forecast and help get ahead of future returns.

    25%of surveyed companies use
    predictive analytics with big data.5

    Using all the data collected from the returns process—including the reasons for returns, as well as their frequency and volume—predictive analytics technology can identify and flag issues that might otherwise have gone undetected.

    For example, if there is a large volume of returns on one item that arrived damaged, the instance would be flagged. Then, a fulfillment team could pre-empt future returns by changing the packaging for that item to prevent issues going forward.

    Predictive analytics informed by big data are time- and money-savers for logistics teams.

  4. 4

    Blockchain

    Track and verify returns against the original transactions to scale back the time and labor of manually checking returns against receipts.

    14%of surveyed companies
    use blockchain.6

    While blockchain technology is still in the early stages of development and use, it is quickly gaining traction and offers a lot of value. The digital ledger of blockchain, which allows information to be digitally distributed but not manipulated or copied, creates a transparent record of a shipment. With this true record, it’s easy to see whether what is in the package when returned matches what was in the package when originally shipped.

    Implementing digital ledger technology scales back the manual labor needed for fulfillment employees to verify returns, allowing them to return focus to their primary roles.

Key Takeaway

These four technologies have been embraced by a number of companies as the keys to an optimal returns process. Leverage one or all of these options and see how technology can help streamline reverse logistics for your business.

While technology offers value for a modern e-commerce business dealing with returns, the landscape of reverse logistics is vast. Discover actionable insights from top companies to tackle seamless product returns head-on: Our full report is an insider guide, rich with proprietary research from Provoke Insights, that can help any business create a sustainable and competitive returns process.

6 Shipping Tactics to Counteract Macro Forces and Improve Customer Experience

The retail world is full of outside forces that can negatively impact customer experience. In this white paper, we dive into the macro forces that most affect e-commerce businesses and share six tactics that leading logisticians use to mitigate them.

Trends and Opportunities Affecting the B2B Shipping Landscape

The growth of the e-commerce industry is changing the way businesses of all types operate. As younger generations come into leadership positions and begin dictating purchases, traditional models and operational practices are shifting.

This growth and change is most often discussed in terms of B2C e-commerce brands, but B2B businesses are feeling it, too. The B2B e-commerce market in the U.S. reached the $1 trillion mark for the first time in 2018 and projections show that the $2 trillion milestone could arrive in just a few years.1 That means B2B shippers will need to stay on top of what’s changing and know when to adjust.

In our recent white paper, The Latest Trends in B2B E-Commerce & Shipping, we dig into actionable learnings to help your B2B business do just that. Here, let’s take a high-level look at some of the key trends and opportunities at play in the market.

Key Trends

Here are the latest developments in the B2B shipping market.

Half of all B2B buyers are millennials.2

This generation has had a huge effect on almost every piece of the economy. Now, they are growing into decision-making roles at businesses and have expectations about what a strong, positive B2B relationship looks like.

What this means for you:
Look to B2C shipping and e-commerce practices for inspiration. Millennials grew up with tailored, targeted and increasingly simple buying and shipping experiences. It is likely that, as B2B buyers, they will look for the same standards and values in the businesses from which they buy.

Smart, connected technology is transforming logistics.

As e-commerce evolves, so too does shipping technology. While autonomous vehicles for shipping are further from adoption, others, like Internet of Things devices, are already being implemented. Gartner predicts there will be around “20 billion internet-connected things by 2020. These ‘things’ are not general-purpose devices, such as smartphones and PCs, but dedicated-function objects, such as vending machines, jet engines, connected cards and a myriad of other examples.”3

These devices can help with tracking, optimization, efficiency and more, and they communicate with each other to make automatic adjustments.

What this means for you:
By using technology to optimize your logistics, you can better scale your B2B shipping business and continue to impress clients with fast, informed deliveries. Find ways to incorporate new technologies to assist in scaling operations and potentially cutting down on costs. We suggest specific tools in our white paper on the topic.

Top Opportunities

Keep your eyes on these opportunities to continue your business’s growth.

Develop a sustainable omni-channel strategy

Tackling omni-channel sales and distribution is an important step toward minimizing waste and maximizing flexibility. Research shows that many B2B companies plan to use online channels for sales and cut down on other methods.4

Once you open your business up to online channels, prepare your operations to answer the potential demand. Make sure you’re ready to fulfill additional orders by evaluating your network of distribution centers and finding ways to streamline logistics concerns.

Build loyalty with an easy returns process

In the B2C e-commerce world, returns are seen as an invaluable place to build loyalty. Companies that make returns easier, simpler and more convenient for customers can win more repeat sales. This is no different, and may even ring truer, in the B2B world.

When a business needs to send something back, it is most often because of a fault with the product, so it matters how quickly the issue can be resolved. Clearly articulate your return policy to avoid unwelcome surprises. Maintain strong communication with your customer. Make it simple to initiate a return, then proactively share information with your customer about the order’s status.

Conclusion

This high-level peek at some of the defining trends and opportunities in the B2B shipping market can help you see how your company could grow in the e-commerce space. Get a more in-depth and actionable look at the market by downloading our white paper, The Latest Trends in B2B E-Commerce & Shipping.

The Most Important Dates of the 2019 Retail Holiday Season

When it comes to the holidays, retail businesses must keep a laser focus on the busiest season of the year. The final months of 2019 are filled with important occasions, peak shopping days and important shipping deadlines.

This year’s season is shorter than usual, with only 27 days between a late Thanksgiving and Christmas Day. Fewer days for holiday shopping and shipping could mean more pressure on logistics teams to deliver.

Use the calendar below to get an early start on the season. Print it, bookmark it or download it for easy access in the busy season ahead.

3 Steps to Turning a Return into a Sale

Retailers of every size know the pleasure of making a sale, and the letdown that inevitably comes when a product is returned. Rather than lamenting the loss, companies should dig deep and implement tactics to help them understand the reason for the return. With that knowledge, they can learn how to turn a return into a sale. Read on for a three-step process to do just that.

  1. 1 Ask why the item is being returned.
    Before you can offer a solution, it’s important to understand the root cause of the return. Empathize with the customer and actively listen to their needs. Implement a protocol, in-store, online and at home. If a customer returns a product in-store, have your employees ask questions about why the product is being returned. If a customer is returning an item through the mail, include a survey in the packaging that asks the same questions, or create a microsite online as part of the returns process, where customers can answer questions as well.

Tip: Set up a Return Merchandise Authorization
Return Merchandise Authorization is a reverse logistics process that requires a customer to contact you before making a return, whether on your website, through email or by phone. This communication allows you to catch the customer in the midst of a return and propose another solution, preventing you from losing a sale.

  1. 2 Suggest an alternative.
    Once you know the reason for your customer’s return, offer them another, more appropriate product for purchase. Base your recommendation on their answers. If a color or fit was off, show them products better suited to their specific needs in-store and across multiple channels. If you can’t find a replacement product, be sure to let them know of any special promotions going on or try to cross-sell them products from other departments.

Tip: Monitor the products your customers are returning. That way, if you find an item consistently being sent back, you can use return data to understand why it’s defective, if it’s overpriced or just not matching up to its advertising. This will allow you to address the issue and prevent returns in the future.

  1. 3 Suggest a gift card or store credit.
    If the customer is intent on returning their merchandise without making a purchase, propose in-store credit or a gift card instead of a full refund in cash or on their credit cards. You could also enforce a policy that requires returns to be redeemed as store credit only. That way, the value of the sale can still be used exclusively in store or online.

In Conclusion

A healthy returns process is the cornerstone of a successful retail and e-tail business. By studying your customers’ return habits and implementing a system to track the reasons for their returns, you can find multiple avenues to convert their dissatisfaction into another purchase.

Should Your Business Offer Free Return Shipping?

With the increasing competition in ecommerce, retailers that offer free shipping, dependable deliveries, accuracy, and free return shipping are potentially more likely to attract customers than those that don’t. While free shipping is an obvious perk, a recent survey discovered that the majority of respondents also consider free returns an important factor in their ecommerce purchase decision.1

53%

53 percent of respondents said they would pick one store over another if the store offer free returns.2

34%

34 percent of respondents revealed they would only purchase from a store if they knew they could return or exchange for free.3

$260B

Why Do Customers Love Free Return Shipping?

Aside from the obvious cost-savings, free returns can provide customers with a sense of security. A study found that in 2015 Americans returned more than $260 billion in goods.4 When customers know they don’t have to pay for return shipping, it allows them to be more indecisive, which is particularly useful when shopping online for clothes, shoes and accessories where there are multiple options, sizes, etc.

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Companies That Offer Free Returns Boost Customer Satisfaction

By offering free returns, brands convey that their customers’ interests are top of mind, which can help brand loyalty and lead to repeat business. Given the potentially high costs associated with acquiring new customers versus keeping existing customers, companies are smart to consider free return shipping as one way help to increase sales.

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Shipping and Returns Can Be Costly for Retailers

However, offering free shipping and returns can be a significant financial undertaking for businesses. Retailers not only have to cover shipping costs, they also need to staff people to inspect returned packages, and if items are damaged, the company will need to pay money to repair or write them off. Additionally, return delays could affect inventory.5 All of these costs add up, which is perhaps why among the Internet Retailer 2017 Top 500, only 13.2 percent of companies offer free returns.6

How to Incorporate Free Return Shipping on a Budget

Free return shipping isn’t a deal breaker. Here are a few strategies that companies can employ to meet their customers’ needs while being mindful of costs:

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Be strategic on when you offer free return shipping. Since nearly a quarter of returns occur over the holidays, consider offering free return shipping during windows with lower return volumes.7

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If you choose to offer free return shipping, be economical by selecting the most cost effective return option. Of note, it’s unlikely that customers will be concerned about speedy shipping when returning an item unlike when they are receiving an item.8

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Use free return shipping as a marketing tool to gain repeat customers.9 This especially works well with retailers selling clothing, shoes and accessories. When customers know they don’t have to pay for returns, they might order multiple items as options and end up keeping more than one.

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Remember that free return shipping isn’t the only way to keep customers happy. If your business builds a trustworthy reputation through reliable delivery, your business can still be competitive without undertaking the costs associated with free return shipping.

In Conclusion

While offering free return shipping may contribute to building brand loyalty and a competitive advantage, it’s important to evaluate if it makes sense for your business. There are multiple routes to achieving customer satisfaction without breaking the bank. To ensure long-standing success, always think strategically and economically, while keeping customer needs top of mind.