Congratulations, your business made it through the holidays. Hopefully, it was both profitable and smooth-going, but let’s be honest—those notions rarely go hand-in-hand. The logistics and fulfillment challenges of the holiday season can often shine a bright light on what’s not working, and the aftermath often leaves you wondering if it’s time to make a change.
After the holidays, many are swallowed by the tidal wave of post-holiday returns or RMA (return materials authorization). Every business experiences these kinds of requests once the holidays are behind us. Customers return items for many reasons, but one thing that remains consistent is their expectation that the return will be shipped expeditiously and their refunds will be processed fast. According to a recent survey by Bizrate, 77% of respondents said they wouldn’t recommend a retailer if the refund process takes too long. That’s why returns represent a critical opportunity to salvage the customer relationship and secure future transactions with them, but only if their expectations are met — and their experience is seamless.
So, how do we ensure those boxes get checked, especially if handling returns is a shortcoming with your current operation or third-party logistics (3PL) partner? As systems stack up your return requests, you might seek the tools and insights to help you stay organized, move quickly, and turn these returns into opportunities for future sales. The time will come to seek out a new 3PL partner, and the learnings you get from observing your current resource during this high-impact period will help you ensure whoever you work with next can meet and exceed your needs.
From “It’s The Perfect Gift” To “I Want My Money Back”
Returns can have financial implications for businesses, including refunding customers, restocking fees, and potential losses on returned items that cannot be resold at full price. According to a recent article by Optoro, Businesses typically spend 66% of a product’s original price to process its return. Managing the financial impact of returns is a key concern for supply chain management.
Also, returned items may not always be in the same condition as when shipped. Assessing the condition of returned goods requires time and resources to determine whether they can be resold as new or need refurbishing, repackaging, or discounting. All of this takes time you certainly don’t have. Returns also disrupt supply chain visibility, as unexpected returns may impact demand forecasts. A lack of visibility into return patterns and reasons makes planning challenging for businesses. You know that an agile and adaptive supply chain is necessary for your ultimate success, and a supply chain that lacks flexibility will struggle to adapt to the fluctuations in demand caused by post-holiday returns. How efficiently these returns are handled can impact customer satisfaction and loyalty. If the return process is cumbersome or takes too long, it often leads to dissatisfaction, negative reviews, and a loss of customer loyalty.
Omni-channel retailers and their 3PL partners often face specific challenges and frustrations during the post-holiday returns season.
5 Common Frustrations for Omnichannel Retailers
- Inconsistent Customer Experience:
Managing returns across various channels (e.g., physical stores, online platforms) leads to inconsistencies in the customer experience. Customers may expect a seamless return process regardless of the channel they used for the initial purchase.
- Inventory Management Challenges:
Coordinating inventory across multiple channels is complex. The post-holiday returns season can exacerbate inventory management challenges, leading to stock level discrepancies and difficulty restocking returned items.
- Communication Gaps:
Maintaining clear communication across all channels regarding return policies, processes, and timelines is crucial. Inconsistencies or lack of communication lead to customer confusion and frustration.
- Integration Issues:
Integration of various systems (point-of-sale, online platforms, inventory management) is essential for omni-channel retailers. Failures in system integration can result in delays and errors in processing returns.
- Reverse Logistics Complexities:
Managing the reverse logistics process for returned items from multiple channels adds complexity. Coordinating the flow of goods back to warehouses, suppliers, or manufacturers requires careful planning and execution.
5 Common Failures of 3PL Partners
- Insufficient Processing Speed:
Slow processing of returned items frustrates both retailers and customers. 3PL partners may fail to meet service level agreements, leading to delays in restocking or refunds.
- Inaccurate Inventory Management:
Failure to accurately update inventory records after processing returns can result in discrepancies. Retailers may struggle with real-time visibility into stock levels, affecting their ability to fulfill orders promptly.
- Poor Communication:
Effective communication between 3PL partners and retailers is crucial. Failures in communication can lead to misunderstandings, errors in processing, and delays in resolving return-related issues.
- Inadequate Technology Integration:
3PL partners may face challenges in integrating their technology with the retailers’ systems. Incompatibility can lead to errors, data discrepancies, and difficulties in tracking returned items.
- Inefficient Customer Support:
Inadequate customer support from 3PL partners can frustrate retailers and customers alike. Timely and accurate responses to inquiries and issues are essential for a smooth returns process.
Many 3PL partners struggle with insufficient processing speed, inaccurate inventory management, poor communication, inadequate technology integration, and inefficient customer support to meet these omnichannel demands. This results in delays in processing returns, discrepancies in inventory records, misunderstandings, errors, difficulties in tracking returned items, and frustration for retailers and customers. To address these issues, collaboration, clear communication, and the implementation of efficient processes and technologies across the supply chain are essential during challenging times like the holiday season.
What’s A Retailer To Do?: Actionable Strategies to Streamline Returns
You’re not as powerless in the post-holiday season as you might think. With returns coming in fast, frequently, and from every direction, retailers should focus on a handful of fulfillment strategies that promote the most efficient use of technology, herculean planning and strategizing, and an all-hands-on-deck mindset. Sure, you may be tied to a 3PL partner who continues to fumble the ball when it matters the most—for now. But keeping your team and systems working like a well-oiled machine will guarantee your success and give you invaluable learnings to discuss with your new fulfillment resource.
Review Your Returns Systems
Assessing the current systems and returns process is a crucial step for retailers to identify strengths, weaknesses, and areas for improvement. To tackle this comprehensively, you should start with a big-picture review of your return policies. Look for recurring themes or issues mentioned in customer reviews, emails, or support inquiries, and evaluate the efficiency of transporting goods from customers back to warehouses, suppliers, or manufacturers. This can provide valuable insights into areas that need your attention.
Standvast offers streamlined processes designed to enhance customer satisfaction by handling returns effectively. We collaborate with clients to gather information on return processing preferences and pricing agreements. Standvast also provides professional services, including technical assessments of current systems, suggestions for supply chain software enhancements, and integration solutions to align with existing systems. Additionally, we offer assistance in scoping and defining new product features for client systems, especially for larger improvement initiatives.
Leverage Thoughtful Data Analysis
Retailers always need to keep data at the core of their decision-making. This notion is particularly important when employing rigorous data analytics to understand your return data better. In doing so, you should aim to identify trends, patterns, and reasons for returns. Analyzing this data objectively can help you understand which products are frequently returned and the common reasons behind returns.
With Standvast, you can incorporate closed-loop data feedback systems utilizing advanced algorithms and machine learning to continuously enhance inventory decision-making. To improve efficiency and service quality, we can integrate into various aspects of your operations, such as warehouse management, returns/liquidation processes, and customer promise/order management systems. These adaptable systems ensure compatibility with any existing infrastructure, offering real-time tracking for transparency and operational control, ultimately guaranteeing reliability and providing valuable information for internal processes and customer communication to support success.
Insights from Your Inventory
It’s simply good housekeeping to assess the impact of returns on your inventory when all is said and done. Check for discrepancies in stock levels and identify any challenges in restocking returned items. Evaluate whether the returned items are being efficiently reintegrated into the inventory. You can close the loop on everything by sending your customers a post-return survey. Not only is this a prime opportunity to gather feedback directly from customers about their return experience, but it’s also a nice final touch to the transaction that consumers will appreciate and remember.
Standvast enhances inventory management by optimizing ordering and allocation processes to ensure timely availability of the correct products at the appropriate Fulfillment Centers (FCs). We help implement real-time order fulfillment decision systems to minimize split shipments, optimize service levels, and efficiently distribute inventory throughout the network, maintaining a balance across all locations.
Gearing Up For Next Year: The Best Practices That Can Grow Your Bottom Line
Managing fulfillment effectively during the post-holiday returns season is crucial for the success of your business. But don’t worry; it’s not all doom and gloom throughout Q1. Some simple but crucial best practices can help you navigate this season in an exemplary manner. You should also make it a priority to streamline the return authorization process to make it easy for customers to initiate returns. Implement online return request forms and automated authorization to speed up the process.
You and your business may have survived the holidays, but the returns season is something else entirely: a chance to get even better at navigating the challenges of supply chain management. There’s only so much that can be done on your end to prepare your systems, people, and mindset for the back and forth of processing customer returns; eventually, you have to admit that you need dynamic, dependable support from a 3PL resource that understands your vision and the importance of flexibility.
The Standvast Fulfillment Center network and service quality contribute to fewer and less costly customer returns, with a decreased risk of overall defects. This, in turn, will drive business growth and improve profit margins.
Ready for Your Returns: Supporting Your End-to-End Logistics Needs
The fully composable supply chain management services and technology that Standvast prides itself on are the smartest solutions for retailers. Our network – the same one that can get your products in the hands of consumers across 98% of the country in 2 days via ground shipping – is built to support your returns in the same seamless way. Creating integrated technology that can immediately sync with your systems is what we specialize in, and you’ll quickly discover that our solutions are more accurate and dependable than any other resource you can find.
Our team is helmed by the logistics leaders who built Amazon’s fulfillment network, and they’ve expanded on those capabilities to create a 3PL resource that helps retailers scale like never before. This holiday season and returns season taught us many valuable lessons, and the takeaways make it clear that succeeding in the future depends greatly on the partners you choose to trust your business with.
