Reverse logistics refer to the complex processes of returning products and purchases from consumers to retailers and third-party liquidators. Reverse logistics is the opposite of typical order fulfillment, but reverse logistics usually includes increased costs for retailers. In today’s world, consumers expect free return shipping, and failure to offer a positive, easy returns experience can have a detrimental effect on future sales. Supply chain leaders need to understand the common problems in handling reverse logistics, how reverse logistics impact customer experiences, and a few best practices for ensuring consumers have favorable reverse logistics experiences as well.
The Supply Chain Trends to Know in 2020
Common Problems in Handling Reverse Logistics
The biggest problem in reverse logistics for omnichannel stems from the complexities of reverse logistics. Retailers do not necessarily know when a product is headed back to the store, and while returns authorization processes may exist, retailers may not find out about a return until it arrives at the warehouse. This creates a significant disadvantage for retailers, and as explained by Transport Topics, many retailers have not figured out a successful way to balance omnichannel retail with reverse logistics management. Moreover, retailers need to figure out what to do with products that have been returned. Do they get resold as refurbished products, do they need liquidation, or does another action need to be undertaken? For example, reclamation of raw materials may be necessary for damaged or recalled products. However, additional challenges exist, notes Ben Ames of DC Velocity, and they include:
- High reverse logistics cost.
- Inability to understand the rationale of returns.
- Poor visibility into products received.
- Inadequate labor resources to “handle” returns.
The Impact of Reverse Logistics on Customer Experiences
According to Daniela Forte of Multichannel Merchant, up to 95% o consumers that experience a positive returns management process will make repeat purchases with the same retailer in the future. Meanwhile, miserable experiences have a more significant impact; consumers that are unhappy with the returns process are three times more likely to leave a company permanently. In other words, positive returns are a win-win, but negative returns experiences will alienate customers.
How to Enhance Customer Experience Through Reverse Logistics
As explained by Forbes, supply chain leaders can enhance the customer experience when dealing with returns by following these best practices:
- Track original purchase data.
- Incorporate technology in the return processes.
- Inspect the product.
- Handle damaged/recalled goods separate from
buyers’ remorse returns.
- Leverage an advanced system to reconcile returns
- Connect the omnichannel ecosystem downstream.
Get Your Reverse Logistics Strategy on Track With Omnichannel
The right reverse logistics strategy can make or break your business, and in the world of omnichannel, you cannot afford to risk letting a customer’s single negative returns experience paint a poor retailer image. Instead, give your customers something “POSITIVE” to talk about when managing returns and reverse logistics working with experts to help you get your returns processes integrated with your warehouse and supply chain systems.