A recent global study of DHL Supply Chain carried out by consulting eCommerce managers of retail and consumer goods companies, reveals that the rise in returns is driving a major reassessment of policies and processes. Nearly half of the companies surveyed are considering changes to their returns management processes to reduce their cost and environmental impact.
The analysis reveals that returns handling processes that are not designed for today’s high volumes are one of the main causes of the problem. Retailers struggle to efficiently process and extract maximum value from returned items, resulting in financial loss and environmental waste. According to the study, 17% of businesses use disposal as their primary method of handling returned items that are not restocked or sold.
Returns have increased by almost 20% in the last two years
With an average increase in returns close to 20% in the last two years, recent inflation worries companies and accelerates the need for change. The lack of integration between e-commerce and other channels exacerbates the problem, as it reduces the chances of restocking and reselling returned items. Designing product flows and cycles in the most efficient and environmentally friendly way is key to meeting this challenge.
DHL’s omnichannel returns management capabilities bring together returns from all sources, and its digitized returns model allows items to be “sorted” to determine the best way to handle the product, whether it be replenishing it at full or discount price, repairing it, reselling it in an aftermarket or recycling it. DHL thus has the ability to fully manage freight across every route, from specialist repairs to charitable donations.
Although the financial burden of returns is being felt more acutely by global economic instability, environmental concerns remain one of the main drivers of change. A third of companies say that they already calculate the carbon emissions associated with returns and the same number plan to start doing so shortly. What’s more, nearly nine out of ten retailers have plans or targets to reduce carbon emissions associated with returns.
The analysis also shows that, in addition to looking at returns management, companies are exploring the use of technology, such as virtual fitting rooms, to reduce the volume of returned items. Many companies are also considering changes to their customer return policies, and a quarter of those surveyed are considering charging for non-store returns. These are changes that, in any case, are being approached with caution from the retail trade for fear that they may affect the decision-making of some customers who increasingly value a rewarding shopping experience.
As it explains Nabil Malouli, Vice President of Global E-Commerce and Returns, DHL Supply Chain«We’ve reached a tipping point in returns, both financially and environmentally, and retailers do well to examine their current returns processes and reverse logistics. Customer experience remains top of mind for retailers, but that doesn’t have to be sacrificed with drastic changes to return policies. Innovative ways to reduce overall volumes, combined with more sophisticated returns management capabilities, enable retailers to offer faster refunds, quickly replenish across multiple channels, repair for resale, and responsibly recycle. Improvements like these have the potential to increase revenue and reduce waste, while improving the overall customer experience.«.