Unpacking Returns Management in E-Commerce

Returns management, or reverse logistics, is an increasingly important process that includes everything that goes beyond the point of sale. With the recent pandemic-induced e-commerce boom, retailers have finally realized the importance of a seamless returns process as part of the e-commerce buyer journey, as a way to differentiate themselves from their competition. What does this entail for retailers, and how has the returns landscape changed since the pandemic?

In the latest episode of our “Unpacking E-Commerce Logistics” series, we sat down with Justin Irvine, Global Head of Product at SEKO ECommerce to unpack returns management in e-commerce. Justin is a 28-year veteran of the freight and logistics industry who has spent the last 12 years building and selling e-commerce services and products. Here are our main takeaways from the session:

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Reverse Logistics and Returns Management

Justin defines “reverse logistics” simply as “the physical movement of returns”; this includes consolidations of returns, shipping of items around the world, and any other aspects of physical products moving around, be it in and out of carriers or from warehouse to warehouse. Returns management, on the other hand, is a much wider conversation piece as it revolves more around the strategy, how businesses engage with returns, and how they handle the accessible data. With many business intelligence tools at their disposal, returns management has become much easier for retailers as they can now access the returns data and utilize it accordingly to improve their business decisions, be it through buying, finance or supply chain management. 

The Role of Returns Management and Sustainability

With the awakening of consumer environmental consciousness, recommercing has become an increasing priority for retailers around the world, more particularly so for those that have to deal with cross-border returns. Justin gave an example of a UK retailer that receives an enormous number of returns from Australia. The carbon footprint impact by flying those returns all the way back to the UK, and then potentially having to send them back out to the US or Australia again is horrific to say the least.

As we dive deeper into the commercial, practical, and logistical aspects of reverse logistics, companies need to have a well-thought-out plan for recommercing. Justin thought that it would be a good idea to talk to 2 or 3 different companies that specialize in recommerce to get a good-fit and solid solution for their sustainability and operations alike. Furthermore, doing so would also allow businesses to incorporate sustainable and green practices as an integral part of their overall sustainability roadmap.

Rising Trends in Reverse Logistics

While the UK has long been a market leader in online retail, Justin claims that the US, Australia and Asia have begun to catch up in all aspects. In the past, many countries including New Zealand, Australia, Canada and Singapore had to rely solely on the national postal service for return solutions. Fortunately for us, things have changed for the better and consumers now have many more options to choose from as more logistics service providers enter these markets in recent years. 

With the increased access to these additional solutions, businesses can expect to see even more opportunities to optimize reverse logistics for customers. As a result, Justin believes that this is an exciting time for merchants to keep their ear to the ground and ensure that they are well informed about the latest industry developments. Moreover, now that businesses can provide a variety of services to customers without having to be based in that country, possibilities are indeed endless. 

Impact of the Pandemic-Introduced E-Commerce Boom

The e-commerce boom has certainly increased the need for better returns management, return choices, and solutions. As a matter of fact, customers, retailers, and logistics service providers have all been questioning if they are doing things correctly. In other words, the surge in demand for returns in the post-COVID era has indirectly enabled different stakeholders to create better solutions and products for consumers worldwide. 

In order to attract and retain more consumers, merchants must consider returns as a distinct point of differentiation. Rather than considering returns as a cost attribute, businesses need to become smart about how they handle returns. Free returns, for example, are effectively an investment in customer acquisition and retention. This shift in approach and thinking is likely being driven by both the epidemic and the rise of e-commerce.

Still not convinced? Find out what consumers truly think of e-commerce returns!

For the full discussion, check out the video below. You wouldn’t want to miss it! 

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About Justin Irvine

Justin Irvine brings with him close to 3 decades of the freight and logistics industry, where he spent the last 12 years building and selling e-commerce services and products. With his delivery and returns initiatives around the world, Justin has changed global thinking in the e-commerce industry, including the way e-tailers view their customers’ journey. He is also a proud New Zealander who gets to call many regions around the world home, and from this extensive travel, drives a truly global best practice in the products he takes to market. His current role sees him moving to the USA full-time to join the SEKO Ecommerce leadership team to further develop and drive change through SEKO’s delivery suite in the US.

About Unpacking E-Commerce Logistics Series

Unpacking E-Commerce Logistics brings together some of the best experts in the e-commerce logistics and supply chain space to unpack key concepts from a variety of trending topics, ranging the use of Artificial Intelligence in the industry to embracing hyperlocal delivery in the e-commerce world. An integral part of this series are our 30-minute long Fireside Chats where we ask our thought leaders questions about not just the topic at hand, but also their career paths, challenges they have faced, and even their future plans.