Ann-Marie Daugherty, senior vice president and general manager of supply chain with Inmar Intelligence, explains the complexities of the returns process for items purchased online — one that requires multiple partners in an efficient “ecosystem.”
The “post-purchase” ecosystem describes the journey that a product travels once the consumer has decided to return it. Individual elements include initiating the return, crediting the consumer, transporting the item to a processing center and on to its ultimate destination, and disposing of that product, whether that means return to stock, destruction, liquidation or sale on the secondary market.
An “ecosystem” involves multiple parties performing the various stages of the returns process. “Individual companies can’t do it alone,” Daugherty says. “It takes a village to have all elements accounted for, to ensure that returns are quick, easy and convenient.”
The COVID-19 pandemic has exacerbated the challenges of managing the returns process by increasing the volume of e-commerce generally. At the same time, consumers continue to expect that returns should be free, placing the cost burden squarely on the retailer. Sometimes that cost is so high that the retailer tells the consumer to keep the item, because it’s more expensive to process the return than to simply abandon the merchandise.
There are steps retailers can take to minimize the cost of returns, including the use of artificial intelligence to analyze consumer purchase behavior and predict the likelihood of a return before it happens. Retailers might also issue a credit if the consumer agrees to donate the item, placing the responsibility for delivery or disposal on the buyer.
Phillips says retailers will steadily improve their ability to handle returns efficiently. “The more we learn, and advanced technology supports each element of the post-purchase ecosystem, the more effective it’s going to be for the retailer, distributor and consumer.”
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