Retail Returns Abound – Sustainable?

REPOST: Jeff Berman, MMH

Just over 50% of the total annual retail package return shipments occur each January. This year was no different and set a record for the 5th consecutive year. UPS reports that 6M parcels were returned during the first week of January.  The flow peaked at 1.4M items on January 3- National Returns Day. This figure outpaced the 2017 returns by 8% and followed on the heels of heavy consumer returns each day in December leading up to the holiday. MHI reports that the seasonal impact from returns can even exceed total online sales for a retailer in that season.

Retailers Get Proactive

The returns piece of retail business strategy today may not be sustainable. But those companies able to open their arms and welcome return shipments strengthen the ties to their buyers. Today’s transparency of B2C transactions requires that retailers match competitive policies when it comes to item returns. And while a huge proportion of returns fall in the category of ‘changed my mind’, large percentages come about because of supply chain snafus or late arrival resulting in a drop in the item’s utility to the buyer.

As retailers embrace the growing reality and impact of return shipments, they have begun some creative programs aimed to motivate consumers to bring products back to a store or store affiliate. Amazon returns are now accepted at Kohl’s and Whole Foods. Walmart recently released a new app feature designed to speed the in-store process for customers making returns. And services like Happy Returns function by accepting back products in a mall kiosk, consolidating them, and then return shipping them to the various online retailers. Firms like Optoro arose to assist retailers with the management and resale of their excess or returned inventory.

Sustainable Supply Chain

Today pretty much every smartphone comes back through the supply chain for repair, resale or recycle. As the Internet of Things becomes reality, more and more electronic equipment, machines, and appliances come on line each month. This will require that the scale of reverse logistics channels equals that of forward logistics in order to keep pace. Think Smartphone as perhaps the first near-perfect example for building this type of circular logistics infrastructure.

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Retail Returns Abound – Sustainable?