Returns (and the resulting reverse logistics) are never ideal for retailers, but they’re an inevitable part of the retail world; Customer returns make up 8 to 9% of total sales, and over the holidays, retailers see a 24% return rate. As shoppers become more budget-conscious, returns have become just as much a part of shopping as buying the item in the first place, both with physical stores and eCommerce. Additionally, manufacturer recalls can cost retailers thousands of dollars. Handling the returns process is overwhelming without the use of reverse logistics and even outsourced help.
Figuring out what to do with returned products–and overstocked items–is a struggle for retailers, and usually their profit margins are hurt by it. Typically, the inventory is sold at far less than its real market value to a mishmash of middlemen, flea-markets and liquidators, or a premium is paid just to have the products recycled or thrown away. Managing the returns process can be a huge burden on retailers and cost them dearly. Reverse logistics, which is the process of regaining value from a returned item, may seem expensive up-front, but, if utilized correctly, it can increase margins.
Big data experts at innovative supply chain solution companies such as goTRG offer improved return logistics solutions to help retailers get more out of their returned and overstocked items than they would simply using traditional in-house processes such as product disposal and extreme markdowns. These companies utilize cutting-edge, data-driven returns management software to identify fluctuations in different markets, identify arbitrage opportunities, and move money and commodities from market to market. Essentially, these companies help retailers find the best method for recouping lost sales and raising their bottom lines. Additionally, these companies provide retailers with the resources and abilities to sale products overseas for higher margins. If retailers need to return products to vendors, these companies can manage that process as well as navigating the vendor contracts and ending warranties.
These third-party companies are more than a simply outsourced service. Their cutting-edge technology allows retailers to use analytics software to develop integrated returns systems that monitor a retailer’s returns, customer service technology, and agents. Retailers may develop their own efficiency dashboards to control and analyze all returns and reverse logistics. These companies will also watch out for irregular returns to make sure that customers aren’t taking advantage of the returns system. They gather any and all relevant data to returns, such as return reasons, particular brands and their manufacturers, and product category.
In addition to analytic and tracking software, these companies assist retailers with the physical aspects of reverse logistics processes. Using smart return technologies, these companies predict profits and make the best supply chain and channel decisions to assure the highest net margins for retailers. These companies provide their own facilities for refurbishing, repairing, restocking, and remarketing a retailer’s products. The retailer will have full access to all returns information, every step of the way.