Returns Optimization in Peak Times
The Peak Season in the logistics sector starts as early as the end of October. The Christmas business is just around the corner and e-commerce promotions such as Black Friday or Singles Day are causing an explosion in order volumes. Experience shows that this also leads to a high number of returns. Returns management, which is intended to guarantee fast and secure processing, is therefore becoming a priority even in peak times.
In order to cope with these increased volumes, both in returns and distribution, existing processes must be adapted and a number of measures must be taken. The optimization of returns often starts with the ordering process, for example through better product descriptions and larger images.
Michael Peters, Vice President Business Development, explains in an interview how Arvato Supply Chain Solutions helps to reduce the returns rate and also to optimize warehouse processing.
As an e-commerce service provider, how can Arvato Supply Chain Solutions contribute to optimizing the returns rate?
In order to reduce the percentage of returns, we first have to record and evaluate the specific reasons for the return. Based on this data, we can then determine in which areas further optimization is needed. This could be, for example, product content or assortment management - in which case we support our customers individually.
Delivery time can also be a key factor that we can optimize. In individual cases, excessively long delivery times can also lead to an increased return rate.
How can we make returns management in the warehouse more efficient?
There are various things we can do to optimize returns management in our warehouse.
Our large international network, for example, plays a decisive role here. Postage costs arise for every return - we can reduce these costs significantly by bundling consignment volumes and using intelligent logistics networks.
Tied up capital is also an important cost factor in e-commerce that we can control. Thanks to the rapid processing of returns, the respective product is quickly back in stock and can be sold.
In addition, the optimization of the logistical value-added chain, processing costs for returns and quality control are further areas in which we as a service provider - always together with our clients - can influence costs.
How do we ensure that quality does not deteriorate while increasing efficiency and simultaneously reducing costs?
In addition to using experienced and long-standing staff at Arvato, the use of technology is essential. It is not a substitute for personnel, but rather a way of building efficiency, speed and reliability. It serves as a support for the employees, so to speak. At today's peak order times, for example, a bag sorter, an automatic film wrapping machine, conveyor belts and visual checks on the employees' monitors help to ensure this increase in quality while reducing costs at the same time.
What concrete measures have we already taken in our warehouses?
We have already been able to successfully reduce the return rates at various customers. Examples of optimization measures include the provision of the right shipping and payment methods, a transparent check-out process in the online store and trained customer management that provides customers with individual advice both before and after they buy the goods. In addition, we have developed omnichannel solutions together with our customers in which "return in store" has been implemented in addition to the pick-up points in the store.
What other measures are planned for the future?
In the future, we would like to work even more closely with our customers in designing their assortments. We have a number of experts who, thanks to their many years of experience in the fashion environment, can support our brands in sizing the future collection. We are convinced that even with less items, sales and turnover will not suffer, but depreciation and returns can be significantly reduced.
The use of (automation) technology will also be consistently pursued by us and will be used in many places in the future.
Data analysis and the utilization of the knowledge gained from the many transactions we see every day will also provide us with important information for improving returns management.
Recommendations for Efficient Returns Management
- Precise understanding of the reasons for returns submitted by end customers
- Recognition and steering of shopping cart patterns that indicate an increased potential for returns
- Offer a wide range of payment and shipping options
- Simplification of the returns procedure and acceptance of returns as a normal part of the business process