Can E-Commerce Supply Chains Benefit From Automating Customer Returns?

With a customer return rate of 20-30%, e-commerce platforms are facing a daunting task. The traditional manual processing of returns is proving ineffective in our modern, interconnected economy, where customer demands are sophisticated, and returns are commonplace.?

Social commerce and the rise in the purchasing power of customers increasingly generate more orders for these businesses to fulfill. Customers can order products from any e-commerce platform anywhere in the country or globally and have them delivered to them in a matter of days -- all without walking into a physical store.?

The result? More purchases and, quite unwantedly, a higher likelihood of returns.?

Automating the returns process will be a significant move that can save businesses a world of trouble. Product returns are no longer a matter of ‘if’ but of ‘when.’ While integrating reverse logistics into the supply chain is a competitive advantage, leveraging technology like returns automation to enhance it propels the business beyond its market peers.

Automating the return process is a clear path to success for these supply chains. It allows them to increase efficiency, improve inventory management, enhance their ability to save cost and time, and improve customer satisfaction rate. Embracing automation is a step towards a more streamlined and successful operation. Rejecting it, on the other hand, exposes reverse logistics and supply chain operations to unnecessary errors, longer processing times, and poor transparency.

For an in-depth guide on Customer Returns Automation, read our piece here.

Industry Voices

"In a world where customers expect convenience and efficiency, automating the returns process is no longer a luxury but a necessity. It ensures our customers have a seamless experience, from purchase to return."

• Dave Clark, former CEO of Amazon Worldwide Consumer

Know Your Term

Returns Automation

What is It?

Returns automation is the application of technology solutions such as the Returns Management System (RMS) to streamline and enhance the returns process. This means optimizing the entire process. In an increasingly complex and competitive landscape, that could be enough to win a customer over or lose them for life.?

Many businesses and supply chains underestimate the power of automation in the returns process, especially because it does not directly impact fulfillment orders and other common metrics that these supply chains rely on to measure progress. However, studies have shown that 92% of customers will buy again if the return process is seamless or easy.

Why is it Necessary?

Did you know that in many cases, customers will make a lot of orders, knowing that they will return them? The idea behind this is to try out the best fit and make an informed decision on what to keep and return. However, this is just one of many reasons customers return what they buy. Sometimes, it is genuinely the fault of the supply chain. So when you know the returns are inevitable, automating it will:

1. Increase Efficiency: Automation handles repetitive tasks like labels, processing, and communication, freeing staff for higher-level work and allowing for faster return handling.
2. Improve Inventory Management: Faster analysis of returned products and real-time inventory data (store stock, outgoing products, and incoming returns) helps with better supply chain planning and streamlined inventory management.
3. Save Cost and Time: Manual returns are slow, error-prone, and expensive. Automation speeds up the process, reduces errors, and cuts costs, giving businesses a competitive edge.
4. Enhance Customer Satisfaction: Automation offers customers more options, transparency, and faster return times, contributing to greater customer satisfaction.

When to Automate The Customer Returns Process?

Automation is not a necessary tool for many supply chains. Some get by just fine, especially in the reverse logistics and return process. However, there are times when it ceases to become an option and turns into a necessity.? That time is:

1. When the return volume is high: Your supply chain and logistics process may get away with manually processing the returns process at a certain volume. However, it becomes too tricky at some point and will require a lot of manpower or slow down the process.
2. When the return process is plagued with inefficiencies: The problem is that they can be very costly for the supply chain. Errors, delays, and inconsistencies will only cripple the supply chain over time. When you notice this happening in your returns process, it is time to automate it.
3. When considering flexibility and scalability: When you anticipate a growth curve in your business, it is time to automate. Waiting to see the effects before automation can be too costly for the supply chain.

What's Up in The Market?

Target’s Supply Chain Chief Turns A Messy Supply Chain Around

To address high inventory levels after the pandemic and compete with online giants like Amazon, Target's supply chain chief, Gretchen McCarthy, revamped their strategy. Doing these entailed turning stores into mini-fulfillment centers for online orders and enhancing same-day pickup and delivery, cutting inventory by $2 billion in two years through better forecasting, and investing in technology to improve visibility and transparency.

JD.com Expands Cargo Airline to Meet E-commerce Demands

JD Logistics, the delivery arm of China's JD.com, is leasing four additional Boeing 737 freighters to boost its cargo capacity. Through this expansion, the logistics business aims to support the growing e-commerce market in China and surrounding areas. The new planes will be based in Nantong, China, and primarily serve routes within Asia. JD Logistics' operation is unique because it operates its own airline (JD Airlines), unlike competitors who rely on outsourced services.?

Overall, the move strengthens its position in the e-commerce logistics landscape.

Air Cargo Boom: Early Peak or Future Borrowing?

Unusually high demand and rates for air cargo persist despite the off-season. E-commerce surges, ocean shipping woes, and pre-holiday stockings have fueled this high demand. However, despite the high demand, uncertainties still persist, such as the durability of demand and low inventory levels.?

These uncertainties have resulted in tighter air cargo capacity and shifting air freight routes.

The Feature of The Month

Did you know that even amidst high return volumes, you can create efficiencies and increase productivity with every single return a customer makes? Our automated returns solutions enhance your supply chain’s ability to streamline the returns management for the business and the customers.

Our Key Features Include:

• Easy & Self-Service: Customers can easily initiate and track returns through a branded online portal.
• Reduce Errors & Improve Accuracy: Automated intake checklists and data visibility minimize errors.
• Process Faster & Maximize Availability: Streamlined processing reduces handling time and returns products to stock quicker.
• Automate Policy Enforcement: The system can automatically approve, reject, or flag returns based on your return policy.

Here is why you need it:

• Customer Satisfaction: Easy returns lead to happier customers, who are more likely to repurchase.
• Faster Implementation: The system can be implemented in 4-6 weeks.
• Increased Efficiency: Automation frees up staff time and reduces manual errors.

Scenario Spotlight

An e-commerce giant was having trouble managing its returns process. As a market leader, customers naturally flocked to the brand to buy what they needed. However, the company was struggling to keep up with the returns process. With the increased purchasing power from the pandemic, customers were buying more and returning more than ever.

The company knew that if nothing was done, customers would not tolerate the backlogs and slow return process much longer. To make matters worse, its competitors were enhancing their returns processes, and customers were beginning to notice.

Turning to ReverseLogix, the e-commerce firm had one request. Automate our customer returns process and enhance it for more efficiency. Being a reverse logistics and returns management expert leveraging state-of-the-art technology solutions, ReverseLogix got to work.

The results spoke for themselves. In a little over three weeks, the entire process was unrecognizable from where it started. Where there were backlogs and abandoned returned items, there was a seamless process characterized by improved accuracy, faster processing, and enhanced transparency. It was a turnaround like no other.

Testimonials

“ReverseLogix basically gave us the value that having two more rockstar customer specialists would have provided, but it’s all automated and never takes a sick day.”

– ReverseLogix Customer, Retail Sector