BY TOBY GOOLEY, SENIOR EDITOR
REVERSE LOGISTICS
strategicinsight
CONSUMERS WHO BUY MERCHANDISE ONLINE OFTEN-times return all or part of their orders, and when they do, they
expect that transaction to be a breeze. Free shipping, preprinted labels, instant return authorizations, and the option to
return e-commerce merchandise to brick-and-mortar stores
have become mandatory for e-tailers if they expect to stay in
the game.
That was abundantly clear in UPS Pulse of the Online
Shopper: A Customer Experience Study, a survey of 3,000 consumers conducted by the research firm comScore Inc. earlier this year. Nearly two-thirds ( 62 percent) of respondents said they have returned products they purchased
online, up 11 percent from the previous year. Eighty-two percent said they would be
more likely to complete an online purchase if they knew they could return the item
to a store or have free shipping for returns; 67 percent said they would buy more
from a retailer that offers hassle-free returns. Returns can be a deal-breaker too: 48
percent would drop a retailer with a less-than-easy returns process.
Therein lies the source of a reverse logistics “vicious cycle.” In order to attract and
retain customers, online retailers must accede to consumers’ demands for quick,
easy, and no-cost returns. Yet by doing so, they encourage their customers to return
purchases. As the consulting firm Tompkins International noted in a recent com-
mentary on its website, consumers knowingly order more products and different
sizes than they need because “they understand that the return will not cost them.”
That’s why the volume of e-commerce returns is growing, and knowing how to
manage them is becoming an imperative for an increasing number of warehouses
and DCs. There are some differences, though, between reverse logistics for online
purchases and goods sold through more traditional retail channels. What follows is
a look at those differences and how they can affect operations.
WHAT’S THE DIFFERENCE?
A typical industrial or retail reverse logistics operation handles consolidated pallet
loads or full cartons, usually containing the same or similar products. E-commerce
returns from consumers, by contrast, are far less predictable. They tend to arrive in
very small and variable quantities, often just one or two items. They may be similar—shirts in different sizes or colors, say—or if the e-tailer offers a wide assortment
of items for sale, they might be completely different products with wildly diverse
handling characteristics.
E-commerce returns generally arrive in better condition than items returned to
Handling returns
of online orders
in your DC? It’s
not quite the same
as “traditional”
reverse logistics.
Here’s why.
The difference
is in the details
P
H
OT
O
C
O
U
RT
E
S
Y
O
F
R
Y
D
E
R
