02 Dec Effective returns management
Conveyor Networks returns management:
Metapack’s forecast of strong retail trading at Christmas is backed up by the latest figures from the Centre of Retail research which suggest that UK shoppers will spend a total of £17.4bn online this Christmas. E-commerce figures are forecast to account for 23.4% of all sales in the 6 weeks from mid-November to Christmas.
There is much focus on delivering the right product to the right destination on time, however returns management also has a big part to play in customer satisfaction and repeat business.
Verdict report that 87% of online shoppers rate a free and easy returns policy as important or very important and 43.4% of clothing and footwear shoppers have returned items bought online during the past year. (The Future of Online and Multichannel Retailing – Verdict)
However IMRG’s research shows that only 70% of online consumers are satisfied with their online returns experience.
On top of this there is the bottom line impact of saleable goods being out of stock and losing value the longer they sit dormant.
An efficient, traceable process is key, however returns are complicated by their unpredictability and the fact that manual intervention is often necessary at more stages of the process than in despatch – increasing the time and cost of the process.
The returns process is likely to include the following stages:
- The item is received and booked into the DC as a return – if there isn’t a returns label on the packaging that can be scanned it will need to be opened to scan a label inside.
- Paperwork will need to be raised to confirm to the customer it’s been received and trigger a refund.
- A visual check for damage is required.
- Electrical items will need testing, in this case they may need to be stored prior to testing, if so where and how.
- Assuming the item is in good enough condition to go back into stock the packaging will need to be checked and the item re-packed if necessary.
- If it can’t go back into stock there are other options all of which require additional processes.
- Does it need to be returned to the original supplier?
- Does it need to be repaired?
- Is it going to be scrapped?
- Investing in your returns
Investing in and automating your operations can improve productivity, traceability and management information. Given the nature of returns a lot of technology/investment would be required to fully automate and therefore the volume and value of your returns function is likely to dictate ROI and the level of spend.
Conveyors on their own will speed up the transport of goods. However goods can leave the warehouse much more quickly once you add automation to the process as this will drive processes such as consistent routing and sorting.
Adding software into the equation gives the ability to quickly and accurately log the information about the item, direct it to the appropriate place, track it and feed the information back to host systems. The data collected and fed back to the host systems can also generate management information that can improve understanding of customer behaviour and drive changes to strategies such as buying, marketing or packaging to improve the cost of sale.