The term reverse logistics really translates into ecommerce returns management. But for many e-retailers, they have always dreaded this aspect of running their enterprising. That’s because most e-retailers are protective of their bottom line and see returns as digging into them while robbing them of a future profit payload.
But such is actually not the case at all. Over the past few decades, a number of different studies have been conducted. Findings from these studies have revealed that the opposite is actually true here. So how does it all stack up for online retailers… and are returns really the nightmare that they have been perceived to be, or are they actually profit inducers that can encourage more sales while growing loyalty and retention?
Reverse Logistics Has Plagued E-Retailers
Historically, returns have plagued consumers. They have forever thought that these returns cost them time and money with no future profit potential. But a Science Daily article cites a study that tends to disagree, and rather boldly at that. The study followed large retailers that offered free return shipping with no restocking fees over a several year period and thousands of transactions. It found that when these amenities were offered, sales grew by as much as 25%, countering the notion that returns cost you money.
Building the System is Too Expensive
A common excuse for an e-retailer to not offer easy returns is that building the system is too expensive. But newer software providers actually make this an affordable prospect. There are several automated returns systems that are now on the market that can add enterprise-grade returns systems to a website for an affordable monthly fee.
Backwards Fulfillment is Time Consuming
Some e-retailers are already overwhelmed by their forward fulfillment, and say that they lack the time or funds to pursue adequate reverse logistics. But if an automated system were in place, much of the hard work would already be done for the retailer. Consumers could use a form to process a return and generate a prepaid shipping label. The software could talk to the warehouse and the inventory system. This would considerably reduce the time and effort necessary to offer hassle-free returns.
Newer Technology Has the Answer
But is there a technology that actually can offer this to e-retailers in a feasible manner? A TrueShip article says yes, there is. Newer integrated systems are being offered by software makers that drop into the site. A few steps for integration are all that’s required. After which, consumers can be presented with an automated online returns system. With the bulk of the work being done for the retailer, it makes it realistic for them to consider integrating.
Benefits of Integration for the E-Retailer
So what are the benefits of integration? For starters, the returns policy can make retailers money, as the aforementioned study highlights. So increasing sales is one part. In par with that are elements like reputation, word of mouth advertising, improved loyalty and retention and overall increased customer satisfaction. What’s more, these cadres all form the foundation of any good retail operation: satisfy your customers and gain more sales.
As a final consideration, for e-retailers that do not believe in making returns easy, it’s rather straightforward. If it’s difficult to return items to your online store, all you are really getting is one-time sales. Customers that find this process to be a hassle will simply choose to shop elsewhere the next time around.