Edition 122, November 2022

Preparing for this Holiday Season Includes the Management of Returns

By Gaurav Saran, ReverseLogix

Retailers across the country can agree that the holiday season is the busiest shopping season of the year—but this year is special. The U.S. Bureau of Labor Statistics reports that from July 2021 to July 2022, the Consumer Price Index for all Urban Consumers increased by 8.5%. Due to high inflation rates and an increased price of goods, many experts are anticipating that consumers will begin holiday shopping even earlier.

In fact, a recent survey by Bankrate indicates that 25% of respondents are beginning—or have already begun—holiday shopping before Halloween, which has historically marked the start of the holiday shopping season. In addition, of those respondents who are planning to participate in holiday shopping, 40% said inflation will directly impact their shopping decisions.

The National Retail Federation found that retail sales during the 2021 holiday season grew 14.1% from 2020 to surpass $886 billion, and with the current trends in shopping behavior retailers need to begin preparing now.

Increases in sales inherently lead to an increase in product returns, so as retailers gear up their front-end operations for the busy holiday season, they need to ensure that their reverse logistics processes are equally as efficient. A fully automated, end-to-end returns management system (RMS) provides retailers with the tools and insights they need to manage the barrage of returns during and following the 2022 holiday season.

Preparing for the Flood

In preparation for a surge of returns due to the holiday season, retailers need to identify their returns goals. If a retailer wants to lower costs, purpose-built returns technology can streamline processes, help train employees, and identify ways to reduce returns before they even happen by analyzing the reported reasons for returns. If customers are reporting that a product is low quality, the retailer can identify and correct issues with the supplier, and if customers are reporting sizing issues the retailer can consider better product descriptions to help consumers find the right fit and avoid returns. In addition, an RMS can help identify whether or not a return is legitimate—with standardized returns initiation processes, retailers and distributors can track individual activity and catch fake returns, pinpointing those abusing the returns policy.

A second goal that retailers need to determine is whether or not sustainability is a priority. In a world ever-more conscious of its buying habits, improving sustainability efforts will lower costs, strengthen customer loyalty, and ensure brand longevity. Because an RMS manages returns initiation, processing, repairs and disposition, the flexibility of the technology allows retailers to configure rules, policies and workflows that align sustainability goals with on-the-ground action, such as priorities around remarketing or recycling. An RMS gives retailers the data they need to incentivize local return locations to minimize emissions and gain higher resale probability based on seasonality and demographics.

Managing Damaged Returns

Included in product returns are items that need to be repaired because of damage in transit or manufacturing defects. During the busier holiday season, where workers and workflows are strained, these product repairs can become challenging for retailers. An RMS gives retailers and third-party partners the tools they need for each step of the repairs process, including configuring workflows by item type or brand, setting rules to reflect sustainability goals, and ensuring product evaluation and repair tasks are consistent throughout the entire network.

In addition, an RMS offers management tools that guide employees on which parts need to be pulled from inventory and navigates them through the repair process. Real-time, detailed reports help retailers catch bottlenecks and other issues before they become major challenges, and customized billing codes minimize any guesswork—streamlining the process and reducing manual tasks.

A Better Customer Experience

Fully automated returns management solutions (RMS) are the key to successful and seamless returns; they provide data that tracks user-specific return patterns and help businesses understand consumer behavior. These patterns help determine which returns are caused by user error and which are issues that need to be corrected on the producer’s side. Based on the patterns, they can distinguish these reasons from each other to determine which causes can be corrected at their end (sizing chart, more detailed descriptions, color representations, etc.) and which ones might require policy creation.

Today's retailers must be equipped with a critically important RMS solution to thrive and find success in this ever-changing digital era. Online businesses can reduce revenue and product loss and increase positive customer service efforts by leaning into the required digital transformation that today's multi-faceted consumer calls for. Gone are the days of having to spend hours or days processing returns and going back and forth with customers. The time has come to adopt a digital system that will manage this process so supply chain leaders can get back to providing outstanding service and quality products while increasing brand viability and protecting the ever-important bottom line. Approvals, status updates, and any shipping information can all be sent digitally, reducing the burden on both parties in the transaction (through the portal chat, text, or email), to let customers know when an unexpected situation comes up and how you will resolve it.

With the proper technology in place, the customer experience can be secure and seamless. A smooth return process is a primary factor as to whether or not a customer purchases from a brand again. An RMS enables retailers to provide a painless experience with quick and easy returns that drive customer loyalty and repurchase rates. When implementing a returns management system, it is important that it is built with customer-centric features in mind, so the experience can be improved in real-time. This allows for retailers to be prepared for influxes of sales and prevent a negative customer experience.

Gaurav Saran
Gaurav Saran is CEO of ReverseLogix, the only provider of end-to-end, centralized, and fully integrated returns management systems built for retail, e-commerce, manufacturing, and 3PL organizations. Prior to founding ReverseLogix, Saran led enterprise sales for Fortune 500 companies at Microsoft. He has held leadership positions at numerous start-up organizations, successfully transforming them from early stages to established growth companies.