Earlier this month the Wall Street Journal published an article titled “Amazon and Walmart Tell Customer to Skip Returns of Unwanted Items”, which created a buzz around this approach. While at first blush, it seems like an easy decision: if the cost of returning is higher than the credit that will be given to the customer refund the item and have the customer keep it. However, there are changes in the customer behavior, the cost of processing items, and the value of a returned item, that require retailers to monitor the situation carefully. Let’s take a look at the financials and potential changes impacting the best decision.
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This Year, Everything Retailers Hate About January Begins in November
Amazon Prime Day has returned. Typically held in July, the shift to mid-October is now being touted as the official kick off the 2020 holiday season. Not to be left behind, Walmart’s Big Sale and Target’s Deal Days are on the bandwagon – with other retailers quick to follow suit targeting sale-minded shoppers buying early this year.
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Value of Speed
As the peak of holiday return volume reaches retailer’s facilities, operational leaders are challenged to move the product quickly through the reverse pipe. This challenge raises the question, how valuable is rapid processing in reverse? The answer is that it is crucial; reverse speed drives value to the customer and to the company’s financials.
Return Reduction
Experienced retail leaders have attempted to solve the return problem and have concluded that the problem typically lies with the customer changing their mind and therefore returns are just a cost of doing business. While this is true in some transactions and a portion of returns are not preventable, there are defects in the purchase process that can be addressed to not only prevent the return but improve the customer experience.
Reverse Logistics Optimization Defined
Reverse Logistics has become a more important and more understood function in businesses over the last few years. As return volumes increase and customer expectations rise, leaders must understand this portion of their business in order to avoid erosion of profit. This article will discuss the definition of reverse logistics, highlight why reverse logistics needs to be optimized, and highlight the key components that make up reverse logistics.
