Christmas holiday returns are the Nightmare after Christmas for retailers. Every year, retailers experience an influx of returns from Christmas gifts given in the wrong color, size, received twice, or simply unwanted.
These returns present operational issues for the supply chain and a giant headache for retailers. What is the solution? Reverse logistics.
We’ll explain reverse logistics and how it will make holiday returns simple for your retailer this season.
What is Reverse Logistics?
Reverse logistics is the reverse of your standard supply chain. Rather than your products moving from you (the seller or manufacturer) to your customers, they move from your customers back to you.
These products are then typically resold, sold to outlet stores, or sold to refurbishment centers.
5 Reasons Why You Need Reverse Logistics In Your Supply Chain
Reverse logistics is a vital component of any successful supply chain. This Christmas season, having a reverse logistics process in place will save you time, money, and a lot of stress. Let’s quickly go through how reverse logistics work.
Online shopping has made buying holiday gifts more effortless than ever – despite the global pandemic.
Black Friday has come and gone, and you may be feeling as though Christmas came early for your retail business. However, when the holiday season comes to an end, you will see a flood of returns that will make you reflect on the celebration you did about record sales over Christmas.
Reverse logistics will provide you with some services that make the holiday return process so much easier.
1. Palletization
When you use reverse logistics, the provider can help you with the palletization of your returns. Everything is neatly shrink-wrapped, palletized, and trucked off to your distribution center.
2. Drop Trailers
Logistics providers like FMI leave drop trailers at your retail locations so large items like appliances can be stored until they are ready to be sent to their final location.
3. Distribution Centers
At the distribution centers, reverse logistics experts will inspect your merchandise and decide whether to keep the items for resale or sell it to a refurbishment center (appliances/electronics) or sell them off to outlet stores (like TJ Maxx, Ross Stores, etc).
4. Returns Will Happen Online This Year
Where you once may have seen customers come into your brick and mortar locations to make returns, you will probably see that much of it happens online and through shipping companies this year.
According to Optoro, only 34% preferred to return their goods via a shipper before the pandemic. Many of these choose to return directly to the retailer. By October, the number of consumers returning online purchases via a shipper had increased to 60%.
5. Keep Your Customers Happy
For customers, returning goods makes perfect sense. Why shouldn’t they return a gift if it is the wrong size or simply unwanted? Customers feel they are entitled to this, and as such, it’s your responsibility as a retailer to make this process fast and straightforward for them. A poor returns process can lead to unhappy customers who may move to purchase from competitors or share their poor experience with friends and family, damaging your reputation.
Reverse logistics is the way to provide a quick and easy returns process for your customers without encountering a financial and logistical nightmare.
How To Handle Reverse Logistics
The key to successful reverse logistics is efficiency across the supply chain.
There are several factors to think about within reverse logistics:
- Transportation of the item
- Storage
- Impact on sales
- Quality Control
- Data entry
- Costs
Haphazard coordination, poor customer service, and the risk of lost or damaged goods can be overcome with a solid supply chain and partnering with a logistics company such as FMI, which offers a Final Mile, returns management service.
This service allows for any retailer to effortlessly and correctly share item return details and logistic data in real-time. Returns can then be quickly scanned and returned to warehouses or distribution centers without headaches or issues.