According to studies, it costs a business 7X more to acquire a new customer than to retain an old one. That’s why it’s important to ensure that your customers enjoy a great brand experience, end to end. Many businesses fail to understand return logistics because it’s a fairly complex process. To ensure proper returns management, you have to collaborate with customers, vendors, transporters, and other players. This can be an expensive and time-consuming affair. By optimizing your returns management, you can not only save money but generate more revenue by engaging customers longer. Before we delve further into the concept, let’s understand what return management means.
What is return management?
The supply chain management process associated with returns and return logistics is referred to as return management. When properly implemented, returns management not only allows you to manage reverse logistics efficiently but also identify opportunities to reduce costs. Return management can be analysed in terms of its subprocesses, activities, and participants. Once you have an overview of the returns process, you can manage it efficiently.
- Use an order management software to make returns easy. You can track returns using a mobile logistics solution, from where you can update returns details and process refunds.
- On the logistics front, work with a trustworthy third-party company if you can’t operate last mile delivery fleets of your own.
- You can also use smart communication on return packages and a well-thought-out returns policy to reduce your number of returns.
How you can improve reverse logistics with the right return management strategy
When trying to optimize your reverse logistics, here are a few things to bear in mind. Remember, the goal is to cut costs while also improving customer experience.
- Returns are an inevitable part of the eCommerce and retail industries. The key is to not get bogged down by returns but use them as an opportunity to improve your relationship with customers. You can also use data from product returns to identify product defects and measure their market performance.
- Ultimately, the purpose of reverse logistics is to cut down your losses. By optimizing your return management, you can make your supply chain more cost-effective.
Examples of return management in the modern world
Return management entails different aspects of returns logistics, from optimizing your returns policy to optimizing pickups and processing. You can work on your return management by referring to other successful brands for inspiration. Here are a few examples of return management in the modern world that you can use as a reference.
- A good returns experience is clear, quick, and structured. Since few users actually read a returns policy, you should focus on reflecting policy details in your UI (User Interface) design like Rugs & Home has. Their orders page simply says – “Don’t love it? Return it for free”.
- Give customers the luxury of making a choice. Instead of forcing customers to take refunds in-store credits, allow them to choose between cash and store credits. Return Magic sellers noticed an increase in the popularity of store credit after offering customers a choice.
- Use geofencing to optimize return logistics. ABAX’s country manager, Chris Miller, swears that geofencing has optimized their logistics, improving cost-effectiveness.
- Leverage returns data to make better inventory decisions to later reduce returns. Midori Bikinis has saved tens of thousands of dollars in unsold inventory by making better stock choices.
- Consider re-selling locally after returns to save on transport costs. ASOS re-sells returned items in Germany, instead of shipping them back to the Homebase in the UK.
- Use predictive restocking to accelerate resales and reduce shelf time. Using technologies like geofencing, you can predict the location of a return package real-time and determine when it can be made available again on your eCommerce store. eCommerce giants such as eBay and Amazon use this technology to ensure restocking without unnecessary delays. It’s the same technology that makes same-day-delivery a possibility.