Optimising reverse logistics and getting value from returns

Retailers are frequently struggling to make their Click & Collect operations profitable due to the huge increase in returns that Click & Collect has generated. The introduction of this new channel has led to a change in customer mindset, which means retailers have to deal with the complexity of more returns.

This change in how customers think and act is real and permanent. It’s having repercussions today, as KPMG’s Omnichannel Retail Survey 2016 identified that 23 percent of fashion returns were intentional, and two-thirds of customers surveyed said free returns was the most important factor when considering returning products.

Increased returns can lead to money being tied up in returned goods as opposed to new sales. For most of the year this could arguably be seen as a cost of doing business, but during peak seasons such as Christmas this can come to a crunch.

With this in mind, the case for efficient processes that make money rather than eat up profits rapidly becomes self-evident. In terms of getting this right, retailers need to consider three pillars:

1. Reliability: It’s imperative to get returned goods back into the system accurately by using scanners, mobile computers or RFID. Best practice in terms of customer experience suggests that it’s important to enable shoppers to return through their choice of channel (in-store, lockers, and pick-up). This only goes to further reinforce the fact that wherever the item is returned and whenever it is dealt with, scanning and processing has to be reliable.
2. Accuracy: With stock going out and being returned through multiple channels, retailers need to be on top of their inventory management. Knowing where returned stock is and where it is wanted is important for accelerated order fulfilment and to reduce unnecessary stock holdings.
3. Speed: Retailers must be able to handle returns in a way that satisfies the customer and minimises costs, but it’s equally important to get stock back into circulation again as quickly as possible. Many returns will be ready to go straight back on to the shelf, which means improved availability for customers wanting these items. In-store re-labelling and scanning back into the stock file keeps the wider stock picture up to date and reduces the risk of overstocking.

Developing improved Click & Collect processes isn’t an optional feature, it’s absolutely essential in the modern retail environment. With returns an increasingly inevitable part of doing business, retailers need to deliver customer convenience in the returns process.

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