In the last two years, online shopping has increased at an unprecedented rate. As consumers have become accustomed to online shopping at least once a week, these (often spontaneous) purchases bring predictable returns. But managing those returns can often become a headache as e-retailers find themselves in a perfect storm of supply chain disruptions, labor shortages and an already busy holiday season.
To manage their returns, e-retailers often try to manage their reverse logistics flow with traditional warehouse management software, but this software is not designed to handle returns. To seamlessly manage returns from initiating the process to determining the appropriate shipping protocols, retailers, 3PLs, manufacturers and all major home furnishing companies need full transparency. Therefore, with the ongoing major disruption of disrupted supply chains and labor shortages, it is vital for e-retailers to automate their returns management systems to improve customer service and visibility across warehouses and shipping locations.
With full integration with other supply chain solutions, a single, purpose-built platform gives departments across the supply chain the ability to streamline their workflows, manage complexities and provide greater visibility across warehouses and shipping locations. For example, warehouses can effectively process returns and items being returned to the supplier, perform repairs and refurbishments, and complete putaways. This allows e-retailers to strategically deploy their resources to remain profitable despite turbulent supply chain disruptions.
This is achieved through the RMS (Returns Management System) platform, which separates the logistics of returns into three focus areas – initiation, processing and tracking/recovery – to streamline the returns process throughout the supply chain.
The return process begins once the buyer initiates the “post-purchase process” by requesting a product return. The buyer is informed in good time about the status of his return via an RMS platform – which significantly reduces the number of queries to the company’s customer service. Because many businesses feel they don’t have enough staff to process orders, using automation to keep the shopper informed throughout the post-purchase process can streamline their staff.
For e-retailers, an RMS provides high-quality data analysis to explain why the product was returned. These insights allow retailers to predict the cost and time of future returns and limit the possibility of fraudulent returns – which pays off 5.9% of all returns in 2020.
Processingtracking and recovery
Data provided by an RMS helps determine if the cost of shipping the returned product back to the company’s warehouse is more than the product itself. With this insight, the retailer can instruct the customer to keep the original item while offering them a product send new item.
Alternatively, if the customer returns the defective product, the RMS solution will determine which storage location is most suitable to replace it. This determination is typically based on proximity and inventory fulfillment requirements. Suppose the item needs to be repaired before it is returned to inventory for resale. In this case, the RMS platform manages the inspection and product evaluation process of the item, enlisting the help of the necessary departments or employees to make the repairs while the solution tracks the progress.
In order to quickly put returned products back into inventory for resale, an RMS solution must first determine which warehouse to ship them to. Next, the platform will conduct recovery efforts to reduce inventory wastage and lost profits. An RMS platform helps reduce the financial and environmental impact of these returns by helping to recycle, repack and refill, return to seller, scrap, liquidate or dispose of the product. The platform will perform this final phase of the returns process by integrating with the retailer’s existing technology systems.
By integrating an RMS solution that streamlines the returns process, retailers can alleviate headaches that often accompany the returns process. A solution to the labor shortage cannot be implemented for months. With the right solution, an RMS can be up and running in six weeks at most. And with its ease of use and reduction in tedious manual work, employees strive to adopt an effective RMS that increases efficiency, creates a more positive work culture, and creates a more satisfying customer experience.
Gaurav Saran is CEO of ReverseLogix, the only provider of end-to-end, centralized and fully integrated returns management systems built for retail, e-commerce, manufacturing and 3PL businesses. Prior to founding ReverseLogix, Saran led enterprise sales for Fortune 500 companies at Microsoft. He has held leadership positions at numerous startup organizations and successfully transformed them from early stages to established growth companies.