Efficient Returns Management Benefits the Customer, Retailer, and Environment
Written by Royston Phua, Supply Chain Practice Lead for APAC region
Online returns are a right under consumer law in many jurisdictions. Globally, customers now expect a smooth and easy returns process from all retailers. Although returns don't have to be offered free of charge, it’s a big selling point if they are.
The modern consumer frequently over-orders: an eye-watering 30 per cent of online purchases are returned on average – a number that’s more than three times higher than the 9 percent return rate experienced by traditional brick-and-mortar stores. One of the implications of this trend that cannot be ignored is environmental damage at the expense of convenience.
With the rise in global events, campaigns, and movements like Earth Day, it’s clear that the future of our planet is a concern for people across the world. So, even though consumers may be driving demand for convenient, hassle-free returns options, they also feel strongly about the effects of climate change, sustainability, pollution, and waste. More informed than ever, they like to interact with businesses that demonstrate exemplary Corporate Social Responsibility (CSR). This is especially the case for millennials, of which 87 per cent would be more loyal to a company that helps them contribute to social and environmental issues. With this in mind, retailers are facing a difficult balancing act: optimising the efficiency of reverse logistics and keeping the customer satisfied, whilst minimising impact on the planet. That is why it is so important to understand how supply chain visibility, intelligent loading/shipping and the use of RFID tracking and drop-off/collection networks can be utilised to achieve this balance.
Supply chain visibility that delivers
With an increase in global logistics year-over-year (of which e-commerce constitutes a large portion), maintaining visibility into the supply chain from the warehouse right to the last mile is becoming essential for efficient deliveries and returns. Picking and sending the correct orders out in the first place, in the appropriate condition, can counteract some of the returns generated by supply chain inefficiencies. Dealing with the collection of unwanted or damaged goods, and possibly sending a replacement, all adds to the carbon footprint of the retailer (and compensation claims), so getting it right the first time is critical. As such, it is extremely important to employ smart technology in the warehouse, which provides real-time data about customer interactions and enables you to honour cancelled orders, even if the request comes in at the last minute.
Supplying barcoded labels or packaging with goods before they leave the warehouse is an effective way to ensure any returned packages can be tracked and sorted correctly, to control waste and re-use stock where feasible. Some retailers are doing this already; their e-commerce systems anticipate that a customer may plan to return some or all of the order (because he or she ordered the same shirt in different sizes, for example). Once returned, barcodes, RFID technology, scanners and mobile computers can pull up product details to help assess a product’s suitability for resale before it is placed back in stock. From an environmental perspective, this approach maximises reuse, recycling, or recirculation, ensures products are not simply binned or later lost in the system, and reduces unnecessary transportation.
Intelligent loading and shipping are also key
At the loading dock, managers cannot physically view all dock doors to oversee operations, and staff are often inexperienced seasonal workers or not yet fully trained. Relying on personnel to judge truck volume by their eyes alone leads to improper loading and poorly-informed decision making, resulting in wasted space and sometimes dangerously-stacked goods. Shipping ‘air’ instead of parcels is clearly a waste of time and money, with excess trucks on the road leading to more fuel consumption and pollution.
Forward-looking companies realise that maximising trailer space makes the delivery process more competitive, efficient, safe, and secure – and of course environmentally friendly. In order to future-proof your operations, you need visibility into key load metrics, ensuring every load is space efficient. It will come as no surprise that a data-driven approach can provide incredibly smart solutions. Trailer monitoring systems such as Zebra SmartPack™, 3D sensors and red, green, and blue (RGB) cameras can analyse loading operations in real-time, calculating the build profile of a container/truck in terms of density, fullness, and weight. Information is then translated into a user-friendly dashboard (viewable on a mobile or static device), with alerts triggered by scenarios like idle bays or under-loaded trucks. This smart loading also ensures packages are stacked appropriately so as to avoid damage – reducing the likelihood of a return.
Once on the road, GPS, RFID, scanning, and camera technology provide real-time data on deliveries, including the last-mile delivery. Although this is nothing new, it is a key step in eliminating re-delivery attempts or claims of non-delivery (leading to unnecessary mileage, pollution, and reordering). This visibility is of interest to all supply chain stakeholders and shortening the delivery window is more convenient for customers too. Single collection/drop-off points for deliveries and returns like parcel shops, lockers and combined retail stores are proving to be efficient solutions across APAC. These single-point locations allow you to reduce delivery time and mileage through consolidated shipments/collections and could potentially end the common consumer issue of ‘missed deliveries. Fleet management via route planning and optimisation ensures no journey is a wasted one and keeps the chain moving. Imagine a concierge for a whole suburban area, not just for a residential block.
In Zebra’s recent study The Future of Fulfillment, 68 percent of global retailers ranked online returns as a key challenge – a challenge that is financial, logistical, and environmental. The e-commerce retailers that will thrive in the future are those who are environmentally conscious as well as customer focused. With millions of parcels in the supply chain, smart data-driven solutions from the point of order are the only way to keep pace with customer demands, as they currently offer the best way to facilitate end-to-end visibility and intelligent decision-making.
