The pandemic is remembered mostly as a period of loss but in a few cases—online shopping for instance—it brought only good news. E-commerce has seen an exponential boost, and now, even with the pandemic behind us, continues to grow. According to a recent report, retail e-commerce sales are projected to grow from roughly 875 billion U.S. dollars in 2022 to over 1.3 trillion U.S. dollars in 2025. With a majority of businesses moving online, it’s crucial to deliver outstanding customer service through electronic channels.
The supply chain, or the trajectory of online shopping from order placement to delivery and return, is an integral part of the customer experience. While the delivery process may be smooth, returns management is one link in the supply chain prone to getting sidelined. Returns management or reverse logistics refers to the process of handling and managing products that are returned by customers after purchase. As total sales continue to accelerate in the e-commerce market, the rate of return is impacted as well. Reverse logistics is a vital aspect for businesses to focus on, and it can be made more manageable with the implementation of an effective system. Being mindful of changing customer expectations and prioritizing customer satisfaction and convenience becomes easier with the right system in place.
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The Challenges in Reverse Logistics
Implementing an efficient system for returns management is a win-win for both businesses and customers: not only does it smoothen out the return process for businesses, but also ensures customer satisfaction and encourages customer loyalty and repeat business. Having said that, we know how managing reverse logistics can also be tricky business. These are three of the most glaring challenges faced with returns management-
- The expense: Last-mile delivery is the costliest link in the supply chain and reverse logistics add to the expense. Starting from the transportation of the product back to the warehouse, to storing, reconditioning, repairing (in case of damaged goods), repackaging, recycling or disposal, all incur added costs to the business.
- Resource crunch: The supply chain can be very demanding when it comes to resources such as personnel, funds and technology. Delivery executives dealing with packed pick-up and drop schedules daily, along with the tedious processing of returns, can easily turn the returns process into a recipe for increased costs, SLA breaches, and poor customer experiences. Once the order is picked up and dropped at the warehouse, resources are required for its storage, repair, repackaging, recycling or disposal.
- Lack of visibility: When there is limited on-ground visibility of resources, businesses can lose track of their supply network, which translates into decision-making paralysis. Think inaccurate inventory counts, difficulties in identifying supply chain bottlenecks, difficulties in data analytics, and fraud detection.
Get to know the history, evolution and future of reverse logistics
How to overcome reverse logistics challenges
Clearly, returns management is a complex and challenging task. However, a Modern Dispatch Management Platform (DMP) is all that it takes to turn the tables. Implementing a DMP can turn reverse logistics into a competitive advantage and potentially drive differentiation for your business. Let’s take a look at how a modern DMP can revolutionize reverse logistics:
- Efficient resource management: A DMP optimizes the use of all your resources so that you save on both time and cost. A DMP will use your existing on-ground resources to automate the process and manage both deliveries and returns simultaneously. This means an optimized use of your resources, which takes down the challenge of high expenses and resource crunch single-handedly.
- Accounting for real-world constraints: Issues with the weather, traffic, and driver availability can easily go unnoticed and add to resource mismanagement. A DMP takes into account all such variables to map out the fastest and most efficient route to manage returns.
- Preference-based planning: Locus allows preference inputs from both businesses and riders to make the returns process even smoother for all parties involved.
- Increased transparency: A DMP allows for better visibility in the last mile which means negligible SLA breaches by ensuring the efficiency of delivery executives. This also means a better customer experience.
The main aim of reverse logistics is to optimize and create more efficient aftermarket activities that will ensure monetary saving through efficient resource management, a wholesome customer experience, enhanced brand reputation and minimal impact on the environment. Locus Dispatch Management Platform is your constant companion right from the moment the order is placed till it reaches the customer’s doorstep and thereafter. It makes the daunting aspects of reverse logistics wisp away and gives businesses a prospect to turn it into a competitive advantage.
Reference:
https://www.statista.com/statistics/534123/e-commerce-share-of-retail-sales-worldwide/
https://www.statista.com/statistics/272391/us-retail-e-commerce-sales-forecast/
https://www.statista.com/statistics/379046/worldwide-retail-e-commerce-sales/
https://www.statista.com/statistics/876378/retail-industry-reverse-logistics-share-united-states/