How to Turn Returns Management Insights into Money in The Bank
ReverseLogix
The only end-to-end, centralized, fully integrated returns management system for retail, ecommerce, manufacturers & 3PLs
The last few years have seen the rise of e-commerce businesses and, with that also, a massive uprising in sales volumes across the e-commerce industry as a whole. However, that is only one part of the story. Most people don't tell you that with this rise in sales volumes, there has also been a significant uptick in product returns across the board. If we stick with the rule of 20 (20-30% of all goods sold are returned), these e-commerce businesses will have to process a lot of returns. A lot.
The problem is that too many returns usually mean the e-commerce business is at risk of financial losses. One key method for effectively reducing product returns will be by leveraging returns data analysis. This is because, to tackle a problem, you have to identify and understand the root cause of that problem.?
Leveraging returns data analysis exposes the reasons behind these returns and gives insights into how to reduce them. However, for this to work, there must be efficient curation of accurate and relevant data from the right data points. The reason behind this is twofold:
Key data points to focus on for an effective returns data analysis include:
To understand the current returns landscape and how returns data analysis can help you improve the profitability of your e-commerce business, read our article on the topic.
Industry Voices
“The data from returns is the most underutilized data in most companies. If you understand why returns are happening, you can improve customer loyalty, and reduce costs.”
Know Your Term
Returns Data
What is it?
Returns data analysis allows you to review customer returns and generate relevant insights. It allows you to examine why products are sent back, how often they happen, and what patterns emerge over time. It helps manufacturers and retailers identify common issues, such as product defects, sizing problems, or misleading descriptions. By tracking this information, your company and supply chain can adjust inventory, improve product quality, and refine customer service return policies. It also helps with forecasting so businesses can plan and manage stock more efficiently.
Why is it Important?
With a compound annual growth rate (CAGR) of 18.9% from 2024 to 2030, the e-commerce industry’s market cap can reach $83.26 trillion by 2030. However, with an average of 20% returns, the current returns landscape still has businesses losing money.
This is where returns data analysis changes things:
1. Identifies Common Return Reasons
Tracking why customers send products back helps you spot patterns. If a specific item is frequently returned due to sizing issues, unclear descriptions, or defects, adjustments can be made to fix the problem.
2. Reduces Unnecessary Costs
Processing returns takes time, labor, and resources. Understanding return trends can help reduce waste, improve packaging, and make better purchasing decisions, leading to fewer losses.
3. Improves Product Quality
If multiple customers return an item because it breaks easily or doesn’t work as expected, there may be a manufacturing issue. Analyzing return data helps your business work with suppliers to fix defects before more faulty products reach customers.
4. Enhances Inventory Planning
Frequent returns can throw off stock levels. You can adjust how much they order by tracking how many items come back and why, avoiding overstocking or shortages.
5. Increases Overall Efficiency
Returns are a part of doing business, but they don’t have to be a major drain on time and resources. By tracking and acting on return trends, your team can refine their processes, reduce avoidable mistakes, and keep operations running smoothly.
What’s Up in The Market?
Although there is uncertainty in the market with looming tariffs and trade wars, businesses and stakeholders are forging ahead. Here are some of the latest trends and news making the headlines
Fed Holds Rates Steady as Inflation and Business Confidence Shift
The Federal Reserve kept the current interest rates unchanged while monitoring potential inflation risks from tariffs, deregulation, and tax cuts. Fed officials see inflation expectations as stable, but consumer concerns are growing, with inflation expectations rising to 3.5%. Business sentiment has dropped sharply, hitting a 17-month low, with companies citing uncertainty over federal policies. Manufacturing surveys also show rising costs and declining optimism, adding to concerns about economic stability in the months ahead.
Fargo’s Retail Shifts: Closures, Moves, and New Openings
At least 12 businesses left downtown Fargo, North Dakota, in 2024, while 19 new ones opened or expanded. Fargo is a key transportation hub, providing access to the Midwest and Canadian markets. Retail lease rates have fluctuated, with downtown rents slightly lower than before COVID, while Southwest Fargo saw an increase. Vacancy rates are highest downtown at 14.2%, compared to 2.5% near West Acres and 5.2% in southwest Fargo.
Walmart’s Acquires a Shopping Mall near Pittsburgh
Walmart recently acquired Monroeville Mall near Pittsburgh for $34 million. Analysts suggest the purchase isn’t about operating a mall but securing valuable real estate for future redevelopment. The site offers existing infrastructure, rental income, and the potential for a supercenter or fulfillment hub. Working with Cypress Equities, Walmart keeps plans under wraps but sees long-term potential.
The Feature of The Month
The ReverseLogix platform is built with meaningful metrics and game-changing insights in every module. With end-to-end returns management and best-in-breed tracking and analytics, we have created a solution that unites all your existing business technologies and delivers metrics and data to every team member.
Our analytics and tracking feature gives you complete visibility across the entire returns journey. It optimizes performance to stay competitive and increases your edge in real-time. The feature also allows you to operationalize all your data so it’s usable and understandable.
But that's not all. You can also access customized reporting based on departments, user roles, or locations so that distributed teams can always stay in sync. With ReverseLogix, you can unlock more value from every return.
Here is what you get:
1. Granular data analytics: Democratize your data and operation insights so everyone can increase their impact.
2. Customizable dashboard: Flexible, configurable dashboards that always show what’s most important upfront.
3. BI on every screen: Go beyond static visibility to access actionable intelligence for better decisions.
4. Role-based reporting: Maintain control with role-based access to accounts and reduce your business risk.
5. Gain insight & edge: See real-time data on what matters to improve your selling, position, and restocking.
6. See the full picture: Gain a top-down perspective and break down your returns composition to discover trends.
Scenario Spotlight
Amer Sports, a global leader in sporting goods, was already enjoying the benefits of ReverseLogix's returns management system for its B2B operations. Faster returns, better automation, and clearer visibility into returns data were all wins.
However,? as the company's B2C business grew, so did the complexity of its returns. They were dealing with a mountain of tried-on, repackaged, or wrinkled products that all needed careful handling. The pressure was on to process hundreds of thousands of returned units quickly and efficiently.
ReverseLogix, already a trusted partner, offered the solution. Their end-to-end returns management system perfectly fits Amer Sports' B2C needs. It provided a seamless way to manage the entire returns process, from the customer initiating a return to the final disposition of the product. The results were impressive.
Amer Sports dramatically improved its return processing speed. Customers received their refunds faster, and employees were more productive. The system's intuitive interface made training a breeze, even during peak seasons. With real-time visibility into return data, Amer Sports could finally make informed decisions about product improvements and reduce overall returns.
Testimonials
“Our decision for ReverseLogix was driven by the idea of having an end-to-end solution for the whole process flow, covering the needs of our consumers with a state-of-the-art returns process for our operational needs.”