Reverse logistics is a logistical procedure that involves bringing a product back to the distribution site from the point of consumption, such as when a delivery attempt fails or when a product is returned to the store.
Reverse logistics has become increasingly more critical in operations in recent years as e-commerce sales have grown. Invesp conducted a survey that revealed that 30% of online purchases worldwide result in returns or exchanges. This can happen for various reasons, including the fact that the customer has never seen the goods in person before making a purchase and has different expectations regarding its appearance, size, or efficiency.
Any company that wishes to provide better service for exchanging or returning goods, or that wants to lower the proportion of goods that are returned following failed delivery attempts, must have a solid reverse logistics plan. As a result, it’s crucial to pay attention to several pointers that enhance the reverse logistics sector. When Is Reverse Logistics Used?
Since the e-commerce era has arrived, reverse logistics has gained even more significance. There are, however, a number of other factors that make it necessary. Here are a few instances:
Customer returns: This scenario mostly involves online transactions. The product is frequently not what the buyer expected when shopping online because the decision is made based on photographs, and for this reason, they ask for a return.
Unsuccessful deliveries: There are a number of reasons why a delivery may not take place, including an incorrect address or a customer who is not available to receive the product at the time. The sequence must therefore go back to where it started.
Driver returning damaged products or parts: If the customer or delivery person notices a damaged product during delivery, they must notify and return the damaged item.
B2B returns: Unsold goods may be delivered to distributors or distribution centers for resale.
How To Optimize Reverse Logistics?
Offer the following two types of reverse operations: The exchange or return process for a product must be simple for the customer. Offering the customer a variety of options for how this procedure will be carried out allows them to select the one that will work best for them. One alternative is for the customer to mail the item or for the carrier to pick it up, either for free or for an extra charge.
Invest in an exchange and return policy: The customer must be made aware of the company’s return policy and how it operates. It is crucial to be aware of all dates, the detailed instructions for returning the item, the deadline for refunds, and the requirements for exchange or return (such as the item being unused and in its original packing, etc.). By making everything clear, you may increase consumer confidence and negotiating security.
Inform the customer: It’s critical to keep customers updated on the status of their orders as they are being shipped and returned. Send regular information on the status of the purchase, delivery, and pickup. The consumer won’t have to get in touch with the business multiple times to raise questions or request further information if the procedure is transparent.
Analyze the financial effects: An effective reverse logistics plan lowers the company’s storage and transportation costs. In order to reduce delivery costs, it’s important to take into account things like the chosen delivery routes, frequency of collection, expected operating expenses, amount and weight of commodities, and the requirement for specialized vehicles. Finding the ideal delivery option for the business and its clients will be attainable in this manner.
Agility is key: The client has the chance to rate the business after the return procedure. The customer is more likely to give the store a positive review, tell others about it, and return to conduct business if the procedure is simple and swiftly addressed.
Delivery optimization tools: Using a transportation optimization tool might be crucial for helping with delivery and accelerating the process. It allows for the management of unsuccessful collection attempts, route calculations, and complete shipment tracking.
Customer Loyalty: The Importance of Positive Reverse Logistics
It is crucial to invest in a strong product return procedure because, in the event of a poor reverse logistics experience, it is normal for the client to be hesitant about returning to conduct business out of fear of experiencing the same problem again. According to the Invesp survey, 92% of consumers stated they would continue to shop in stores provided the return process was straightforward and 79% wanted it to not add to their costs.
A positive experience also ensures that the consumer will refer the business and its goods to others, enhancing the company’s reputation.