5 Ways to Master Reverse Logistics
One increasingly important way companies can create a better experience for the customer, manage costs, and set themselves apart from the competition is by mastering reverse logistics. Smart logistics managers understand that how customer returns are managed can have a big impact on profits.
This is particularly true in online retail. E-commerce customers have often not seen or tried the product they’ve ordered, so they are much more likely to need or want to return it because it doesn’t meet their expectations or needs.
Because reverse logistics is such a critical part of e-commerce, we will now look at five areas where online retailers and logistics managers can influence how customer returns are handled for a positive effect on both the customer experience and profits.
One key reason for returns is that the product didn’t meet the customer’s expectations or they don’t understand how to use it. Returns of this type can be reduced by providing detailed information during the sales process in the form of videos, enhanced product images, and 360° views, along with text descriptions and technical specs, to help the customer understand exactly what they are buying. Also, encouraging customers to leave reviews will help, as these will provide the perspective of users of the product, which will invariably deal with aspects that you haven’t thought to cover in your marketing and sales materials. The goal is to give consumers confidence and greater understanding about their purchases, before they make them.
Your distribution center provides another opportunity to prevent returns. A well-thought-out system of quality control (QC) checks will ensure that customers receive products that don’t need to be sent back because of problems that should have been caught before the items were shipped. Some obvious areas for the QC checklist are damage, cleanliness, and broken parts. But also make sure that the packaging, barcode, and paperwork are correct, so that customers receive the items they bought.
Technology and systems
You likely are already using technology for warehouse management and shipping efficiency (such as with carrier selection). But have you considered how technology can also help you manage and streamline the reverse logistics process? The right tool can help track returns along with all the documentation, ensuring that the returned product is handled correctly, inventory counts are accurate, and items are properly disposed of.
A good returns policy is one that will fit the needs of both the customer and your business by reducing the number of returns and maintaining profit margins. The key is to strike a balance between being customer-friendly enough to keep consumers happy, and tight enough to encourage customers to make well-considered purchases. A balanced approach will keep margins intact while ensuring consumers still feel valued.
An educated customer service team is essential in reducing and preventing returns. It is a waste to have customers return products simply because they couldn’t figure out how to use them and couldn’t get their questions answered. Investing in a support service that has broad enough hours to meet your customers’ needs (24-hour if you ship outside of North and South America) can pay off in returns reduction. The key is to be accessible to customers via the means of communication that they prefer (phone/chat/social media/email) at the times that are useful to them.
The overall value of a smooth returns experience is that it will increase the number of repeat customers and referrals through word of mouth and social media. Online retailers who view returns and customer questions about their products as opportunities to build connection and loyalty will strengthen both their brand and their relationship with the customer. Which ultimately strengthens the bottom line.