Increasingly, the Internet is being used to help automate reverse logistics management because its Web-based approach cuts costs and increases visibility into purchase and return behavior. According to Gartner Research, in online sales alone, automating the front end of returns offers an opportunity to reduce costs on returns as much as 73%. Automation provides insight into what goods are currently in the reverse supply chain, helping companies lower shipping costs and labor dollars and increase asset recovery.
Customer Care with a Personal Touch
Managing Returns for Speed-to-Revenue
Control Shipping Costs
Shipping also contributes to the overall cost of the returns process. Controlling the transportation method used for a return can result in significant savings derived from carrier discounts. Additionally, shipping a prepaid return label with a return (or allowing one to be generated online from a Web site) presents the customer with an easy—and “cashless”— transaction. In this way, shipping costs are known and can be netted out of a customer’s refund.
With a better understanding of the returns process, it is easy to see how the benefits of a reverse logistics management solution can extend beyond initial asset recovery. By providing historical data and reports that specify which items were sold, which didn’t, how often goods were returned and why, a solid returns process can have a major impact on an overall logistics program. For example, tracked data can show which items customers are more responsive to, thus helping companies adjust inventory to increase sales and decrease potential returns.
Taking this a step further, the real-time information generated by an automated asset recovery system gives retailers opportunities for up-selling and crosspromotion. For instance, an individual customer who returned a green wool sweater because it was too scratchy may receive a 20 percent discount on a green cashmere sweater with a matching scarf.
An Afterthought No More
The visibility and automation gained through a reverse logistics management solution help streamline the returns process. As the overall number of customer returns logged continues to rise, it is not surprising that companies are investing more in their reverse logistics processes. Thus, taking a look backward at key logistics processes such as returns processing can actually help companies move forward and stay ahead.