For many organizations, reverse logistics is a daunting task. After all, most supply chains are created to get products out the door, not welcome them back in. Online ordering has been made a simple, one-click process. E-commerce as a whole has been designed as a user-first experience, with an order-management system doing much of the heavy lifting for most brands.
Making returns as hassle-free as purchasing is the final frontier for the supply chain. And while product returns may be part of the cost of doing business, they don’t have to affect a company’s profitability.
A business that takes too long to refund after a return can harm its relationships with both the consumer and supplier. How it manages returns can make or break the brand. Product returns often have a negative effect on a business, but when done correctly, they can improve the company’s image and inspire customer loyalty.
The way a company handles its customers during a return process can prove to be a competitive differentiator. Excel in this area, and you’ll see the impact on your bottom line. Here are five strategies for putting an effective reverse-logistics process into place.
Know why returns happen in the first place. Given the expense that comes with returns, retailers must put in the effort to determine the root cause. That way, they can determine whether or not the current return policy is playing a part in encouraging a costly volume of returns.
For example, if a particular product is continually being sent back, it might be because customers simply don’t know how to use it. Perhaps the instructions provided aren’t clear enough. Giving customers detailed information by using product imagery and instructional videos is one way to reduce the frequency at which a product gets returned.
Understanding the customer journey is a great way to determine the root cause for returns. Put yourself in your customer’s shoes, and you might see what’s driving them to send items back regularly. In addition, you can identify patterns that might lead to the adjustment of policies or clarification of product details.
Have transparent monitoring systems in place. Plenty of businesses carefully monitor their products across the sales process. However, when the product is sent back, they aren’t always aware of how it’s handled on its way to them or to a manufacturer.
By achieving visibility over the reverse supply chain, companies can highlight areas that need improvement, and also impact overall product quality. This type of monitoring feeds into overall omnichannel inventory management. Tracking all aspects of reverse logistic can help identify, for example, whether or nor a product needs complex repairs or additional parts. Close monitoring can help a retailer decide to invest in a cheaper replacement part, no longer stock the product, place it on the drop-shipping list, or scrap the product altogether.
Implement clear return policies. The e-commerce sphere has created specific customer expectations when it comes to buying, and in this case, returning products. Easy, one-click purchases and next-day shipping have made it easier than ever to shop. As a result, customers expect the same type of convenience when sending something back.
With clear and easy-to-follow return policies in place, you can increase customer satisfaction and reduce the strain on your customer service team. When customers know they’re able to get a quick return, they’re more likely to send the product back in a working condition.
This works both ways. Your service team needs to know the return policy inside and out. To ensure this, have specific call-center solutions in place so that customers can get in touch with the returns team with ease, and invest in an employee handbook maker to equip the team with all the information it needs.
Invest in the right technology. In addition to an effective inventory management system, there are pieces of technology you can incorporate into your supply chain to make the returns policy even smoother.
A transportation-management system (TMS) and warehouse-management system (WMS) allow for greater efficiency over the course of a reverse logistics operation. These applications combine to keep you in the know about where a product is, while always maintaining the correct documentation.
VoIP phones allow customer-service teams to remain connected across the product lifecycle. With more teams working remotely due to the COVID-19 pandemic, the importance of effective communication has recently come into even sharper focus.
Add return labels to the original packaging. This is a straightforward change to make. Doing it can reduce delays dramatically, while simultaneously improving customer satisfaction. In most cases, the retailer can incorporate pay-on-use postage within an invoice. It can then be placed on a sticker that the customer can simply peel off and pop onto the product for a hassle-free return. Not only does this help the customer, but it also gets the product back to the seller much more quickly, improving the efficiency of the entire process.
Rather than falling short of consumer expectations, retailers must adjust to the increasing prevalence of returns. That means designing supply chains to process both outward and inward products with maximum efficiency. An optimized reverse supply chain can help retailers reduce returns, while improving customer services and better managing asset recovery.
In practice, reverse logistics can prove to be a highly complex undertaking. But even small and simple adjustments can produce exceptional results. Through forensic monitoring and a focus on customer satisfaction, any retailer can reduce costs, minimize losses, and boost customer retention.
Sam O'Brien is the senior website optimization and user experience manager for EMEA with RingCentral, a Global VoIP, video conferencing and call-center software provider.
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