Due to the exponential rise in online shopping, which now boasts 87% of all purchases, warehouses are brimming with opportunities to innovate by using data. Charlotte Monk-Chipman, marketing director, Rebound.
Whilst many warehouses are bursting at the seams with automation and robotics, there’s now a need to cast a light on the murkier side of retail, returns.
The latest shift in shopper demands means that reverse logistics cannot afford to be left behind. The demand for an easy returns process now far outweighs the appetite for instant delivery with 73% of shoppers prioritising simplicity of returns over instant gratification, with just 40% wanting instant delivery (Accenture, Global Consumer Study 2019).
(Listen to a recent episode of The Logistics Podcast - Denby Pottery & Reverse Logistics - where we interview ReBOUND CEO Graham Best)
Research from Optoro revealed that 69% of surveyed retailers believe returns to be vital to creating a good customer service offering and that returns can bring to their customer service offering. With the delivery element optimised to the nines, returns are set to take centre stage in 2020. So, it’s time for logisticians (retail or otherwise) to seize the returns opportunity to elevate their reverse logistics operations by championing data as their secret weapon.
As a first step towards effective data adoption, logistics organisations should recognise where the process has fallen short in the past. There’s a real need to consider the appetites of modern consumers and brands in conjunction, and innovate services to meet the needs of both.
We’re increasingly seeing retailers tailor their service for a global, tech-savvy audience with higher expectations. This means efficiency, personalisation and innovation have become the key requirements asked of logistics organisations from retailers. This is a shift from the logistics of yesteryear which centred solely around speed.
Data allows warehouse operators to have more of a grasp on the different demographics at play and how, depending on the retail client, they can match their service to the requirements of the audience. For example, with 73% of 18-24-year-olds saying they regularly shop online, we can expect this demographic to really shape the online fashion space over the coming years. Furthermore, our research shows that 46% of 18-24-year-olds have returned via parcel shops or lockers in the last 12 months, compared to just 18% of 55-64-year-olds. The challenge now for retailers and logistics organisations alike is not only growing their service offering, but matching these to the needs of different consumers.
If we isolate the focus to returns, we’re seeing a shift as the logistics industry begins to explore more than just “free returns”, and is now exploring other positive return attributes such as choice. These can range from drop-off locations, parcel shops that utilise mobile QR codes, to more precise, shopper-selected pickup appointments. Customers ̶ and by extension the brands serving them ̶ are demanding an increasingly flexible range of choices when it comes to reverse logistics.
Utilising data to aid forward planning and, in turn, streamline processes will be the key selling point in reverse logistics. Flagging and tracking inbound products, particularly in the fashion industry - where returns can be time-consuming due to cleaning and damage checking - will shape strategy and profits. Retailers ignoring the returns data gap could stand to lose a significant amount of money due to the fast fashion phenomenon and a tendency for purchases to convert from the new season must-have to a heavily discounted sale item in a matter of days.
One of ReBound's long-standing clients Wiggle, has always had a strong returns policy of 365 days, however, after identifying a 30% uplift in return rate, they knew they had to take action to match their returns experience with evolving shopper demand. The online cycling group moved away from a paper-based returns process to an online returns journey, and since removing in-parcel labels from outbound orders, Wiggle has already seen a reduction in customer queries. An online journey provides the ability to flag a returning item to a brand, before the parcel is opened in a warehouse, empowering retailers to plan ahead during frantic peak periods, and rapidly turn products around and back on sale swiftly.
The link between human expertise and automation will also be shaped by effective data use in the warehouse. Without using an online return journey, automation in reverse logistics is challenging because every parcel arriving at a logistics centre is a surprise. Even with parcel tracking, these returns still need to go through a manual process of being thoroughly checked and inspected, a huge ask for warehouses tackling peak periods.
Monitoring returns data allows for better peak planning to appropriately staff warehouses, making sure returns don’t just fall by-the-wayside when the pressure is on to get outbound shipments out the door.
The relationship between data and reverse logistics is not to be underestimated as we move into the new year. Although there is still a noticeable void in returns data throughout logistics processes, this topic has been in the spotlight for the last twelve months, and we expect this conversation to gain momentum. The challenge for logistics organisations will be how they capitalise on this increased attention to an area that has long been neglected by both themselves and retailers.