As e-commerce sales continue to grow exponentially, there's another metric that's rising: the inevitable occurrence of order returns, exchanges, and refunds!
Unless the logistics If starting a business To do this efficiently and with minimal costs, it quickly becomes difficult to retain customers and run a profitable team.
Ecommerce returns: the problem of the last mile and how to solve it
It should come as no surprise that e-commerce sales are growing in large numbers around the world.
One point, however, emerges from the general Business perspective often overlooked, the number of order returns, the inevitable reality of e-commerce business, is increasing. Today, the e-commerce industry sees an average response rate of around 10-11%.
Numerous research studies have shown that approximately 90% of today's consumers check a website's return policy before making a decision. A satisfactory return policy gives consumers the confidence they need before making a purchase. Even before they actually rate a product! These are the times and business models we live in today!
~ An effective way to reduce last-mile delivery costs due to returned orders is to use reusable packaging and reusable packaging for units. This saves costs and helps you be a responsible corporate citizen that upholds green logistics practices. especially since it deals with the other, more demanding part of a logistics network e.g. delivery on the last mile. However, the opposite is also true, which means that a strong returns policy goes a long way in retaining customers and achieving satisfaction.
That's why today your reverse logistics is just as important as your delivery mechanism for (outbound) orders, as logistics managers quickly realized that "delivering the product to the customer's doorstep" is not always the end game. of the delivery cycle, this is often extended!
As a result, they are now setting up their delivery network to forward the order return to the fulfillment center in case the customer requests a return of the order.
Obviously, no seller would want or even expect their order back, but that is the unavoidable truth of the online retail world. So e-commerce players have come to terms with it and are now taking steps to better manage their returns and reduce the likelihood of this happening in the first place.
Last Mile Operations Management: a complex and expensive task.
Managing last-mile operations is complex and challenging, and when you factor in the added logistics of reverse logistics it becomes> even more. There are different types of supply chains and logistics operations that involve last-mile functions.
- B2B supply chains: Here the last mile logistics manages the material supply for the production process, e.g. B. Parts and Replacement Parts.
It is also implemented to deliver inventory to physical and online stores
As you can imagine, managing reverse logistics across different types of supply chains, product types, and stakeholders can be quite a challenging task.
Reverse Logistics: How should companies act? deal with it?
As mentioned above, managing order returns in the online retail world is much more complicated than in an off-the-shelf store. Oddly enough, there needs to be a reverse logistics process as well-planned as outbound logistics. Add to that, it's a slow and cumbersome process with various elements such as refunds, refunded inventory management, and associated checks and balances.
Let's look at some solutions to manage order returns and how companies can reduce their incidence.
1) Embrace automation: To To sum without the necessary automation of their logistics processes, both outbound and in this case reverse logistics, it would be impossible for logistics companies to manage delivery schedules and operations across all regions. This isn't a simple case of a customer walking through the door of a physical
store to request a refund or exchange! With 24/7 e-commerce operating at scale across global regions, dealing with multiple tax regimes and regulations, order delivery, and reverse logistics is a complex and difficult task. If you don't use as much automation as you need, you're bound to fall short, and with disastrous results.
Based on the previous point, perhaps the best example of introducing automation is implementing shipping software.
Modern , Automated shipping software allows logistics managers to automatically optimize delivery routes by taking into account various elements that are important and constantly changing, such as Traffic, weather, delivery windows, etc. Routes must be planned to include both the delivery and return of packages.
Using fulfillment software to manage reverse logistics allows you to:
Speed Place Order - Return: The shipping software incorporates reverse logistics when planning product delivery. In this way, it helps logistics companies to start the return process faster, make the best use of company resources (fleet vehicles, drivers), and ultimately provide better service to customers.
Big Data Analysis Capability: Implementing shipping software to manage your supply chain and logistics processes brings everyone into the ecosystem online. This in turn generates a lot of data including the category of returned SKUs, reasons for the return, customer feedback, etc.
The powerful data processing capabilities of shipping software give logistics teams deep insight into the key reasons and enable them to make informed decisions.
Efficient operations at scale: Obviously growth and Profitability is a goals of all companies. In particular, one of the biggest challenges for growing retail businesses is managing returns for their orders. Robust fulfillment software enables you to do this efficiently, quickly and with the transparency you need.
3) Select a 3PL equipped to handle reverse logistics - There are some important things to consider when choosing a 3PL, e.g. B. reputation, fees, geographic coverage, scope, etc.
—Be sure to research your reverse logistics process! If not, you probably would have made a choice that could be your Achilles heel.
3PLs with strong reverse logistics typically store returned packages in their third-party warehouses and handle the entire order return, refund, and replacement process, including inspection, replenishment, and rejection. , refund, replacement (etc.). The shipping software they use directly impacts their capabilities.
When assessing your reverse logistics skills, ask about some of the following:
- provide return labels for disposal?
- Can integrate seamlessly with your existing MIS and deployment workflows?
As can be seen from the above, strong reverse logistics is crucial to deal with the inevitable problem of order returns. . Therefore, logistics companies would do well to implement best practices for this, including the use of modern technologies such as the latest automated software for last-mile delivery.
Read More about Reverse Logistics In Ecommerce
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