Holiday Gift Returns: Another Chance to Engage the Customer


Retailers are using end-to-end return management systems to successfully execute reverse logistics and grow brand loyalty amid the busy holiday shopping season.

After struggling with product shortages for a good portion of the pandemic, U.S. retailers have been sitting on a record $732 billion of inventory as of July – a 21% increase from a year ago, according to Census Bureau data. With the unprecedented surplus of unsold merchandise, many of the country’s largest retailers have kicked off holiday sales earlier than ever in hopes of clearing their warehouses enough to accommodate a new round of winter orders. Unfortunately, many gifts will result in returns.

Even as our country deals with recent economic fluctuations and inflation, the National Retail Federation (NRF) has predicted holiday retail sales between November and December will grow by up to 8% over 2021, which could reach more than $960 billion in sales. However, along with an increase in holiday shipments is the certainty of increased returns. Retailers must ensure they are prepared for seamless transactions this holiday season with an end-to-end returns management system (RMS).

Efficient returns process = happy consumer

More than 10% of U.S. retail sales made during the 2020 holiday shopping season were returned, the NRF estimated. That came out to about $428 billion in returns. One survey the group took found that for every $1 billion retailers make in sales, they average about $106 million in returns. Returns come with costs, and they are obviously not spread evenly across all retail, so we know that some companies will get hit harder than others. As retailers prepare front-end operations for the busy holiday season, they can ensure a smooth experience for themselves and the consumer if their reverse logistics processes are efficient. The best way a business can be sure of efficiency is to create a frictionless returns process through the integration of an end-to-end RMS that has adaptable and configurable workflows.

Due to the fact that the returns process is also one more encounter with the consumer, it’s an extra chance to engage with them and one more opportunity to improve their overall experience. When they are dealing with an organization that utilizes an end-to-end RMS, it optimizes their experience from the very beginning to the very end. When a customer has a seamless and pleasant return experience, it will play a major role in whether they will return to a brand for future purchases.

See also: Retail is the Ultimate Testing Ground for AI/ML

Accessing important data

One of the most beneficial things about a cloud-based, end-to-end RMS is that it can seamlessly be integrated with other solutions and then manage an entire returns process while also analyzing returns behavior and trends. This gives retailers some important insights that enable them to get ahead of any potential problems. Most companies that frequently deal with inefficiencies and costly returns do so because they don’t have data that can improve their operations. A retailer that’s dealing with inefficiencies can’t determine where the problem lies if they don’t have the proper data to analyze. The use of an RMS opens the floodgates of data by gathering and delivering real-time returns tracking and analytics. That data can then be accessed within every queue, module, and order.

All of the data enables a business to stand out among other companies by giving the consumer exactly what they want. An RMS has the capability of being uniquely customized to each individual company’s specific needs, and it can be updated at any time to align with customer feedback, supporting a positive and seamless experience for all.

Consumer insight

If a consumer is in a position where they are making a return, they often want their refund as soon as possible, and they want to be able to track the entire process. However, each business must do some leg work to be sure the original purchase is verified, the returned product is received, and it has been found in acceptable condition. With an RMS, individual companies can set different rules for different customers, and it can trigger a credit or refund at any time during the returns process. This flexibility for retailers translates to complete visibility for customers and can get them their money quicker – again, supporting a pleasant overall experience, which means they are more likely to return to the business in the future to make more purchases.

Considering the environment

When a retailer has a complete overview of the returns journey, they can identify inefficiencies, eliminate any complexities and act on cost-saving and sustainability priorities – something that is gaining importance to consumers. Customers are paying close attention to how sustainable a company has made itself, so it’s a detail that retailers must think about when they are perfecting their returns process. Yes, catering to the consumer is a key to business, but now, so is catering to what’s best for the planet. Especially because worldwide, only 20% of discarded textiles are reused or recycled, and return shipping transportation creates the same emissions as more than 3 million cars each year.

Clearly, reverse logistics plays a major role in the environment, and business owners must be aware of the importance of this. An end-to-end RMS supports retailers in getting returned items put back in stock and inventory faster. Plus, it deploys efforts to reduce the financial and environmental impact a return has, as well as minimize inventory waste by aiding in the process of recycling, repackaging, and restocking. As it pertains to recycling, meticulous limits for disposals can be designed by standardizing the work across teams and locations, guaranteeing that returned items are processed reliably.

Welcoming the holiday shopping season

The busiest shopping season of the year is already beginning to get into full swing. It’s an exciting time for retailers and consumers alike. While businesses watch excitedly as their profit margins climb, they must do so with the anticipating that they will encounter an increase in returns, as well. It comes with the territory, but the details in reverse logistics are the key to customer happiness and brand loyalty. A cloud-based, end-to-end RMS can support a retailer in streamlining the entire returns process so that consumers have complete visibility, guaranteeing they will have an enjoyable and seamless experience during every step of their shopping journey.

Gaurav Saran

About Gaurav Saran

Gaurav Saran is CEO of ReverseLogix. He is a Silicon Valley entrepreneur with a passion for leveraging disruptive and emerging technologies to provide innovative enterprise solutions. As founder and CEO of ReverseLogix, Gaurav brings deep industry expertise and is responsible for driving the overall company direction and product strategy. Previously, he was with Microsoft for over six years, leading enterprise sales for Fortune 500 companies and driving strategic executive relationships.

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