The worldwide e-commerce boom continues. Recent studies confirm the excellent prospects for online trading. Return management plays a decisive role in this. Only when returns can be handled efficiently is a decisive success factor secured.
In Germany, the growth rate is no longer in double figures, but in the Asian part of the world, e-commerce is only just really picking up speed. For many online merchants, however, too many returns are still the big problem. The goal of any returns management system must therefore be to reduce the resources and time spent on returns to a minimum.
Fashion sector is particularly strongly affected
Every year it´s the same: After Christmas the return rate rises strongly. But not only then, but throughout the whole year the fashion and accessories sector is particularly hard hit, with an average return rate of over 40 percent - in the worst case even over 60 percent. The reason is clear: customers only try on the goods after delivery and therefore order several sizes of the same product at the same time. But in other industries, too, the figures are not exactly rosy. Only in the food sector is it less than 10 percent (source: EHI study on dispatch and returns management in e-commerce 2018).
Every return causes considerable costs: it has to be sifted through and, in the case of clothing, checked for traces of use. In the case of electrical goods, a functionality check is also carried out. A not inconsiderable item is the postage and shipping costs that many retailers pay for their customers.
Measures versus returns
Detailed product information in the online shop is a decisive measure for avoiding returns, in order to offer the customer a reliable decision-making aid: Zoom functions, 360° views or detailed product descriptions as well as customer evaluations have a significant influence on the return rate. The method of payment also plays a major role: purchase on account is most likely to lead to the return of goods.
For warehouse logistics, on the other hand, the internal handling processes must be designed in such a way that they can withstand permanent pressure. For example, through a well thought-out location strategy or secure shipping packaging, which can also reduce costs. If this packaging is used for any return shipment, it will also reach the retailer undamaged and the goods can possibly be sold as A-goods again.
Intermediate buffering as a solution?
Since the management of returns in logistics can quickly develop into a cost trap, optimized solutions are required. For example, intermediate buffers that allow quick access to returned products. By avoiding resource-intensive sorting back into the warehouse and manual handling, they also reduce internal process costs. These are short-term warehouses in which returns do not have fixed storage locations, but only find space until they are picked again.
Conclusion: Sophisticated processes as the key to profitability
Returns management increases and decreases profitability. The aim is to keep the throughput time of the goods as short as possible and to keep costs under control. In addition to measures prior to ordering, intralogistics also plays an important role. Those who manage to bring the returned goods back to online trading quickly with sophisticated processes will continue to benefit from the worldwide boom in e-commerce.