How are returns handled in logistics?
Nowadays, returns are part of a real strategy, which is not without cost, but is essential to satisfy consumers. Understanding the different logistics practices is important to the success of any business. In the age of e-commerce, returns management is an integral part of the business.
Online sales result in a large number of returns that travel around the world every day. The sales sector most affected by returns is undoubtedly thetextile industry. Today, to be successful in the market, it is essential to make things easier for customers, which is why free returns and packing slips are a real business strategy. When returns are easy to make, customers can buy products just to see them or make a judgement. Optimising the consumer experience is therefore an integral part of the sales process, because a satisfied customer is a potential loyal customer.
How do I handle returns properly?
To begin with, here are some key figures to better understand the value of returns management:
- 25% is the number of online purchases returned and it is still rising;
- 30%: these are the buyers who recognise that they are ordering the same item in several sizes, colours or other parameters in order to make their choice;
- 33%: the number of retailers who have to increase the price of their products to compensate for the costs of returns.
For any business, the primary goal is to limit returns, as this creates real costs and lost profits. However, it is an unavoidable part of the sale. How do returns work?
- Entry of returned goods into the warehouse.
- Product preparation.
- Evaluation of the returned goods.
- Return of products in stock.
All returns are carefully checked before being put back into stock. However, in some cases, once the customer has indicated a desire to return an item, the product is marked as in stock for other future buyers. After receipt, if the product does not comply with the company's return policy, it may be refused to the customer and destroyed.
With the rise in returns, it is in the best interest of companies to ensure that the transport of goods back to the warehouse in the opposite direction is limited.
The profit losses made by companies can be explained by :
- returns which are synonymous with expenses and loss of revenue for e-commerce sites;
- the cost of return postage paid by the company (where applicable);
- handling fees ;
- costs related to damage incurred during transport.
In order to limit losses, it is in the interest of these companies to :
- Allow returns to build customer loyalty;
- Determine a quantity of returns to achieve a projected budget;
- record return quotas to improve;
- remove items that are returned too often from the site.
How to limit returns?
As returns of goods incur significant costs for companies, the strategy to adopt is to ensure that returns are limited.
Identify the reasons for returns
First of all, there are two types of returns, returns of purchases and orders in shop and returns by post. In the case of returns of items, the reason for the return is regularly, if not systematically, requested. If the reason is based on the item itself and not the consumer's taste, there is room for improvement in the company's strategy to limit these returns.
The most common reasons for return are related to :
- a damaged item;
- the wrong size ordered;
- an item that does not conform to the description.
A few tips and strategies can be implemented to significantly reduce returns.
Improve product description and quality control
What can be done to reduce the number of returns related to the non-conformity of the product, which is supposed to resemble the description given on the site? It is advisable to provide detailed product description sheets, to inform the consumer properly. In this way, the risk of dissatisfaction and therefore of returns is reduced. The presence of a 360° video is also a real asset so that the customer can get a general idea of the article he or she wants.
If the item is reported as damaged (this also includes disappointment with the quality of the product received), the company must adopt its strategy upstream to offer better quality products and thus provide an excellent consumer experience, but also meet the current quality requirements. In order to do this, it is important to carry out a quality check on each product that is potentially subject to inclusion in the stock of items that the company wishes to offer for sale. In order to limit sizing errors when selling clothing, the online sizing guide available to customers is a must, allowing them to better select their size according to the product.
Optimising consumer satisfaction
Satisfaction and customer service are integral parts of the sales strategy. It is very pleasant for the consumer to have access to an online chat service with an advisor, or to be able to easily contact a customer service by e-mail. Finally, it is important to include buyer reviews and ratings, so that potential customers can form an opinion and make a better choice. For example, if a product is small and this is apparent from the reviews posted, it is sufficient to choose the next size up and thusavoid disappointment and the return of an item that is too small.
Respect the estimated delivery date
It should also be noted that delivery times are a criterion for returns. Indeed, orders are regularly returned because they are received too late. Going on holiday, birthday party, etc. Purchases made for a particular event but not received in time are likely to be returned to the warehouse.
In summary, returns are an integral part of the sales process and the selection criteria of buyers when making a purchase, but they can significantly reduce a company's profits. That's why it's essential to do everything possible to optimise the customer experience. However, many prospects do not place orders if returns are too complicated or at their expense, so facilitating returns remains unavoidable to boost sales and attract and retain customers.
Today, many retailers offer free returns, making it easier for customers to retain their loyalty. If you have an online store, but are having trouble managing the logistics of returns,outsourcing logistics can be very beneficial. You delegate to a team of experts who will ensure the proper management of storage, handling and delivery.
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