It’s Time to Revamp Your Returns Program

The holiday season has finally come to an end, but that doesn’t mean retailers and national parcel carriers are getting any reprieve from this year’s record peak season. Now, both brace for a returns peak season with U.S. holiday shoppers expected to return around 1.9 million packages by National Returns Day on January 2.[1] [2] [3] But this year’s unique conditions foretell unusually high returns which will require major changes to the traditional retail return process.

This year is expected to produce extra returns traffic thanks to the uptick in e-commerce sales for 2020’s holiday season. Studies have shown that while 5% to 10% of in-store purchases are returned, retailers can expect anywhere from a 15% to 40% return rate for online purchases.

In light of these changes, brands still use an antiquated returns process that’s costly and not efficient. Returns are (literally) piling up in back rooms waiting to be boxed and sent back to a DC or processing center. Then you add the cost of using a parcel or LTL carrier to ship these returns, in some cases across the county, is going to cost brands 20%-30% more in 2021, due to the carrier rate increases and growing surcharges. Not to mention, the cost incurred by marking down returns is estimated at 50% of the returns price. Andrew Hogenson, Global Head of Consumer Goods, Retail and Logistics at Infosys Consulting said https://www.nbcnews.com/business/consumer/record-breaking-holiday-returns-expected-consumers-remain-wary-exchanging-gifts-n1253975 “When these items come back, oftentimes they come back up to 30, 60 or 90 days beyond when they were purchased, causing them to be out of season and that's going to lead to significant markdown returns...markdowns are one of the categories that can drive profit issues for retailers.”

In some cases, Walmart and Target are encouraging customers to keep or resell unwanted gifts that they have deemed not worth paying to have shipped back to them— even after receiving a refund.

The existing store infrastructure is a struggle to process returns and the consumer can also find the returns process challenging. Tobin Moore of Optoro told NBC News https://www.nbcnews.com/business/consumer/record-breaking-holiday-returns-expected-consumers-remain-wary-exchanging-gifts-n1253975 “89 percent of customers who have a bad online return experience say they won't buy again from that retailer online and 95 percent of them say that if they have a good returns experience, they're happy to come back and buy again.” It’s safe to say if consumers what convenience and a good experience, retailers, and e-tailers need to revamp their returns program.

With a $71 billion predicted surge in reverse logistics, there are many reasons brands are looking for partners like GEODIS City Delivery to help design a returns process that’s cost-effective and efficient. Using last-mile solutions that re-engineer the way brands process returns and design a program that keeps return inventory closer to the consumer. By doing so, it saves time, a lot of money you won’t pay parcel and LTL carries and you avoid costly markdowns. It starts with a good in-house technology for real-time inventory tracking and management and a program that is designed to rapidly assess the status of the return so it can be restocked, re-inventoried, and resold. A good returns program will also enable returns that can be transferred locally to another store or discount outlet. There will be some returns that still need to go back to a DC or processing center but by understanding, you have options to partner with GEODIS City Delivery, so they can help you make better business decisions by designing a new returns program.

Finally, through GEODIS City Delivery’s alliance partners we help retailers offer their customers a self-service returns portal for contactless, convenient returns using automated lockers/kiosks.

They can also be programmed with built-in incentives--such as discounts and coupons-- to drive repurchases, delight customers, and grow customer loyalty. After all, it’s crucial that retailers get the returns process right, as 92% of consumers reported they would buy from a brand again if the return process was seamless[4]. [5] 

Bottom-line, GEODIS City Delivery offers last-mile solutions for an agile returns process freeing up space and time to increase logistics efficiency and profitability. And based on the brand’s specifications, GEODIS City Delivery can design a return solution from multiple channels to refurbish, recycle, liquidate, or return to the inventory for optimum cost savings and efficiency.

Retailers have made it through 2020: now it’s time to look at returns and reverse logistics through a new lens. Partner with GEODIS City Delivery so you get returns right the 1st time.

See how GEODIS City Delivery can manage the after-sales and return logistics process with proven reverse supply chain know-how and an extensive network that will help your company to stay sustainable throughout every season.