It’s fairly evident to see how the global pandemic has drastically accelerated the world’s shift to digitalization. As people spent more time indoors, due to government restrictions like localized lockdowns and shelter-in-place measures, they necessarily looked to technology to help with their day-to-day operations. This can be highlighted with the transitions to remote working and distance learning.
Among the most notable hallmarks, however, that the world is truly becoming more reliant on the digital realm is the growing relevance of e-commerce. Over the past year, online sales skyrocketed, reaching record-highs. Consumers were ultimately drawn to e-commerce out of necessity, but they primarily remained for its convenience during this crisis.
While this does sound well and good, e-commerce can bring certain perils into the light. Reverse logistics, in particular, can prove to be detrimental to both sellers and consumers without the proper processes in place. This is why the need for more sophisticated services for returns management has become vital.
The Mounting Effects
If a certain product doesn’t meet your expectations, it’s only natural for you to want to send it back to the seller. That’s essentially what reverse logistics is. It’s the process of returning goods from the consumer back to the merchant. Just like any other business operation, this simple act is integral to business growth and consumer satisfaction.
However, returns are growing rapidly, that it’s beginning to get difficult to keep up with them. A drastic increase in returned goods has also accompanied the sudden boom in e-commerce. This is putting an immense strain on the supply chain, which can worsen if left unchecked.
Give Back, Toss Out
It’s important to note that returns aren’t entirely eco-friendly. Most people believe that the goods they return are integrated back into a seller’s stock and resold to other consumers. Unfortunately, this isn’t always the case. Many items that are returned, especially during the holiday season, most likely end up in landfills.
There is a huge environmental cost that comes with returning goods, essentially because it contributes to significant greenhouse gas emissions. Recent reports have shown that around 15 million metric tons of carbon dioxide are produced from returned items found in landfill wastes. Merchants would opt not to put a returned item up for resale for various reasons, the most common being damage.
A Different Kind of Returns
On the other hand, from the side of retailers, the costs of returns can usually amount to trillions of dollars every year. This is because of the added expenses arising from certain facets, including transportation, warehouse storage, and replacements if necessary. All of these things have only been exacerbated as the global pandemic rages on.
Should this issue persist, it’s more than likely going to affect consumers as well. Prices could increase to offset these losses or, worse yet, the option to return might come with extensive procedures that would hope to discourage consumers. In the end, it’s eventually going to turn into a lose-lose situation for both sides.
Reverse logistics has proven to be one of the greatest challenges that the general e-commerce industry faces today. A myriad of circumstances primarily drives returns. For instance, poorly displayed photos on online platforms that cannot reflect the actual product have been found to fuel at least 50% of customer returns.
Regardless, the urgency to provide a solution to this issue should not be overlooked. Optimizing the management for returns through comprehensive software is extremely crucial, especially as the e-commerce industry continues to grow amidst the current crisis.
No Need to Rush
One possible solution would be for online retailers to draft more relaxed returns policies for their consumers. This will mitigate any sudden uptick in returns while removing the pressure on customers to “fall in love” with a product right away.
Put to Good Use
As for consumers, they should also lessen their urge to return goods that aren’t necessarily all that bad. This is especially true in a time when “conscious consumerism” is taking center stage. Fortunately, other retailers have implemented a process where they refund consumers for an item they wish to return while allowing them to keep it.
Adapting better reverse logistics as the e-commerce industry progresses will only prove to offer benefits for both sides in the long run. Sellers will no longer have to worry about the added costs of this process and the strain it puts on their supply chain. On the other hand, consumers will surely get to have a more seamless end-to-end experience throughout.