Overcoming tunnel vision in ecommerce returns management
You can’t plan for returns management without considering the returns
So you have a returns & exchanges portal. Great. You are doing what you can to encourage exchanges over refunds. You are giving your best effort to simplify the customer journey. And yet, you are still hemorrhaging because of the high cost of return. What now?
Refunds, exchanges and customer journey are not the only metrics to take into consideration when defining your return strategy. To overcome this tunnel vision, you need not just look at the forest, but at each one of the trees: the returns themselves.
Returns are physical items. They exist. Returns need to be considered, weighed (literally) and compared to other similar items. They need to be contextualized. Let’s break it down:
Who bought them? What else did they buy in the same order? Consider the purchase history of the returner: what have they bought before, and what are they likely to buy next? Ideally based on this information you can provide personalized and differentiated policies for each return. A serial returner may get one policy, a bracketer may get another.
Where are they coming from? How are they been handled along the way, and by whom? Where are they going to? What is the cost of the reverse logistics versus the cost of the COGs. Is the return journey even worth it? Perhaps you want to get your top sellers back to the warehouse as soon as possible, but the Halloween decoration, you prefer to sell locally. By understanding the journey, you can unblock the congestion and free the returns to take the most economical, sustainable and profitable route, perhaps even route it to the place where that same inventory is needed.
The next life
What is the optimal location for each return? How likely are they to be resold? If they can be resold, where is the most convenient reseller? Which resellers have the highest resell rates? How can you resell each item as quickly as possible and as close as possible to the original asking price? How can you expand your point of returns and points of resale?
If your returns are not in resellable condition, can they be recycled or refurbished? If so, where? Can you leverage your local ecosystem for resale, refurbish, recycle and donate? A stellar returns management process is an end-to-end one. It needs to leverage partners in the system for the most optimal outcome. It takes a community to handle returns, and by analyzing each item, you can define in advance the best partner to work with.
What is the carbon footprint for each return and how can you improve on this? How can you strengthen your eco-system and be an inspirational brand that actively works on ESGs, CSR goals and enables your customers to make eco-friendly choices?
The Forest and the Trees
Returns are like fingerprints; each one is unique. Without taking this uniqueness into consideration, one is basically dooming every return to follow the same route. Billions of returns are likely to reach the same destination; which is usually reselling at loss, or worse; landfills and incineration.
It’s time to consider both the forest AND the trees; for the bottom line, the consumer, and the planet.
Photo by Alfred Kenneally on Unsplash