In 2021, online shopping continued to make up a large percentage of retail trade and the trend is unlikely to be reversed during the peak season. The retail industry has been continually challenged throughout the year with supply chain issues and HGV driver shortages, making it more difficult to meet the increased demand in the festive season. In addition, there will be added pressure to keep up with the inevitable returns that will come in the new year. Retailers must make changes to their operations in order to process these effectively whilst providing their customers with a positive experience.
Peak season brings an increase in sales and revenue for many retailers, and 32% of these are predicted to be online, dramatically increasing the number of deliveries needing to be fulfilled. However, there is an inevitable expectation that many orders will be returned to the warehouse. In January 2021, Royal Mail saw returns surge by 63% on “Takeback Monday” compared to the normal number of returned parcels per day in December – a theme that occurs annually.
Returns can cost UK retailers a massive £60bn a year with a third of this generated purely from online shopping, particularly amongst the younger demographic, with a huge 60% of 16-34-year-olds having returned an online order within the last year. It is no secret that returns are one of the main reasons for consumers to contact customer support desks, so it is essential that retailers prioritise the fulfilment and management of this effectively to retain customers and ensure high levels of satisfaction.
With the shortage of HGV drivers plaguing the industry, however, managing returns could be even more of a challenge. So, how do retailers and logistics companies optimise their use of existing resources to ensure this is executed in a cost-effective and timely manner?
A smarter delivery
84% of shoppers claim they would reject a retailer following a poor returns experience, so it is clear that a frictionless and quick returns process is vital. Effectively communicating with customers throughout can produce an increase in customer confidence and trust. However, in order for retailers to provide an exemplary returns process in the midst of the current challenges, they must leverage real-time visibility of the supply chain.
With the use of scalable and advanced route planning and home delivery optimisation software, supply chain performance can be transformed and retailers can maximise the utilisation and efficiency of existing resources, speeding up returns collection and transportation. Route planning solutions continually optimise demand and collections capacity and resources to improve service and productivity whilst reducing costs, streamlining the end-to-end handling of any returns. Through Electronic Proof of Delivery and a real-time view of assets, customers can track their returns and feel confident and satisfied with the retailer.
Combining this with a warehouse management system (WMS), retailers are able to unlock flexibility and agility gains. An effective WMS can provide the ability to inform the shopper the moment the returned item has been received, building confidence and rapport, as well as logging it into the inventory again quickly to allow it to be approved for sale faster. These processes can speed up returns handling by 49%, giving a satisfactory experience for the customer and an updated inventory for the retailer with minimal delay.
Planet-friendly solutions for coping with returns
Increasingly, UK shoppers are taking an interest in the environmental impact of their purchases. According to research from Descartes in Autumn 2021, a huge 60% consider the impact on the environment of online orders. Adding to this pressure on retailers, there have been an increased number of discussions around emissions following the COP26 summit and an upcoming ban on the sale of new petrol and diesel vehicles.
It is crucial that retailers consider this when offering both deliveries and collections. Indisputably, returns have a negative effect on the environment and create needless damaging emissions, yet the smallest adjustments to operations can have a huge positive impact on how eco-friendly operations are. Many retailers and delivery companies have invested in purchasing Electric Vehicles (EVs), which can mitigate the growing costs associated with the UK’s Clear Air Zones, but it is also necessary to ensure that intelligent route management is used so the right vehicles can be deployed to match capacity with demand in real-time. Continuous optimisation of routes can improve the efficiency of the fleet and lead to a 5-25% reduction in fuel consumption.
Conclusion: coping with returns
Using intelligent solutions can support retailers to ensure they are offering a good customer experience throughout the peak season and fulfilling returns in an effective and timely manner into the new year. The difference between a smooth and seamless experience and a negative one is the difference between gaining and retaining customers or losing out to competitors. Maximising the efficiency and productivity of operations with existing internal resources through automation and optimisation is vital due to the ongoing shortages and simultaneously minimising the environmental impact will improve customer perception and increase sales.
Andrew is Head of Marketing at Descartes Systems UK Ltd and has over twenty years’ business-to-business senior marketing management experience with high technology solutions (hardware, software and services) in complex business-to-business markets that includes logistics and transport with organisations such as Intel, Securicor, Unipart Technology Logistics and Orange.