As logistics typically manages the movement of products from the distributor to the customer, Reverse Logistics, the other way around, is the complex process of moving products steps back the supply chain from the customers that wish to return them, usually, to the distributor or the manufacturer. Handled ineffectively, re-inprocessing a product that was previously out-processed and opened by the customer, more often than not, becomes a costly service to provide. As customers expect their returns to be handled conveniently and free, there are 3 things we need to understand, first: 1. Regular problems with reverse logistics, 2. The impact on the customer experience, and 3. Best practices to retain customer satisfaction amidst reversed logistics.
1. Regular problems with reverse logistics
The biggest problem with reverse logistics is the omnichannels involved in getting products to the customer in the first place and transport complexity in reversing the order. Most sellers today don’t know where a returned product is, let alone where it came from and the steps involved since the initial outbound to getting it back. Upon receiving returned goods, many don’t know what to do with it or which omnichannel should handle it next. Thus, upstream supply chains need to decide how to handle the returned products. A necessary product recall, for example, after discovering defects or safety issues that might endanger the consumer or risk legal action, could make or break a reputable company.
Other complications include:
- High cost of goods purchased: As outbound logistics is made cost effective with well planned itineraries and best transport modes, the high cost of reverse logistics often results from the opposite; poorly planned journeys back by simply reversing the initial itinerary or making unnecessary detours. The nearest transport agent unable to make the pick up due to inappropriate vehicle, volumn or product requirements, whatever the reason maybe, there are a number of scenarios that causes inefficiencies in reversing the process and thus increases costs.
- Incomprehensible reason for return: shops that offer 7-day guaranteed return or collect on delivery (COD) at destination options allow customers to change their mind on a dime and reject delivered packages or payment at will with no apparent good reason. Such shops essentially have zero control over the cost efficiency of this last-meter supply chain and beyond.
- Zero product tracking visibility: transported products remain in the system with active barcodes that allow them be tracked from the warehouse throughout the delivery process up to the point of ownership transfer where it is delivered to the customer. Once delivered, that is, the barcode becomes inactive where the customer has no way to re-activate it which makes returned products impossible to track the same way.
2. The impact on the customer experience
According to a survey carried out by ShipBob, Daniela Forte, Multichannel Merchant’s Content Manager, shared that more than 95% of customers that have had good experiences returning a product will return to repeat purchases again. On the other hand, only one-third of the customers with bad experiences will return to do business again while the rest are permanently turnoffed.
3. Best practices to retain customer satisfaction amidst reversed logistics
You can retain customer satisfaction amidst reversed logistics by implementing the following best practices:
- Track product status from order to delivery.
- Application of technology in the return process.
- Checking returned goods.
- Separate damaged and defective returns from change of heart returns.
- Update inventory.
- Connect omnichannel ecosystems.
Good reverse logistics strategy can benefit the business greatly. In the world of omnichannel commerce, no one can risk hard earned customer satisfaction with bad return experiences and neglected reverse logistics management. Regardless of the quality of the product being sold, turnoffs turn to permanent turnovers far easier than a business can get out of the red back into the black. Good reverse logistics, for that reason, can be one of the best marketing tools for a company through satisfied customers’ word-of-mouth. Two bird with one stone; efficiency and free publicity.
Compiled by: SCGLogistics
References and Photo: veridian.info, multichannelmerchant.com