Thanksgiving is just around the corner and you are all geared up for it! For your supply chain processes that is. You have conducted market research, devised business strategies and advertised attractive discounts and offers on all social media platforms to attract consumers. This go around, you haven’t ignored returns and have come up with a generous returns policy window, offered free returns shipping and provided consumers with the BORIS option. All because you know that consumers are more likely to buy a product if the returns process is easy. Operationally, you’re set for peak, stocked and staffed up to handle colossal volumes of forward orders. But it doesn’t stop here. While easy returns will definitely increase your forward orders, you may have also signed yourself up for a significant spike in returns. When returns constitute say, an average of 35% of your total forward orders, how you handle that percentage can change your revenue and profits game!
Let me set the stage for you. Returns are entering your four walls and you have allocated resources to receive these returns into your warehouse. Your associates have SOPs and Business Rules on their station to guide them and decide the unit’s fate. While many units can have different rules designated, we will take 3 units for example. Unit A should always go back to vendor, unit B should never be liquidated, and unit C should always be disposed. Your seasoned associates know this inside out, however, you may have a newly hired associate that allocates unit A for liquidation instead of back to vendor. If only humans were infallible! The end of life of these units largely depends on your receiver’s knowledge and opinion. Each associate has a mind of their own when grading the unit. And let’s not forget about the units that don’t have any rules or restrictions around them. What if this guesswork is taken away? Will you be able to make better decisions? Will you be able to route the returned unit to the best possible recovery channel? Will you be consistent in the process? The answer is YES!
Today, there exist smart solutions that use machine learning and predictive analytics to provide your returns with the next best home. This can be sending units back to your stock, returning to the vendor, selling on secondary marketplaces like Amazon or Ebay, liquidating or disposal. The eligibility of these channels is defined by your business rules and the final disposition of the unit is based on the predictive machine learning algorithms that route inventory to the highest value channel. These solutions are changing the face of a once ignored returns industry by offering tangible benefits in the form of reduction in operational costs and environmental waste.
Another advantage of these solutions is the flexibility in the offering. Whether you want to implement a solution in your own facility, direct returns to a 3PL and use the solution there (Think about how you can efficiently use your facilities only for forward activities!) or want your stores or call centers to use it, there’s always an option. Most solutions are cloud based (Think APIs), platform agnostic and scalable, thus, making the implementation and upgrade process easier. They can also be integrated into your ERP for faster and smoother customer crediting process. The opportunities are endless!
Furthermore, along with smartly dispositioning your returns, having a returns management solution can help you track your returns in real time. The ability to run custom reports can aid your focus on categories that get returned the most, common return reasons, return % and more. Having this visibility will help you devise better business decisions, product and marketing strategies and nip problems in the bud.
The returns industry easily costs over a billion dollars today. With the holiday season just around the corner, sales are going to increase. However, these sales will inevitably come with the baggage of returns. The question you should be asking yourselves is – without losing customer-centricity, how can you manage returns efficiently and recover the most dollar value from them. Contact us today to help you get started right before peak!
Contributor: Akshita Vaze