The Edge - Volume One

HOW THE SURGE IN eCOMMERCE DRIVES DEMAND FOR REVERSE LOGISTICS WAREHOUSE SPACE FREE RETURNS?

How did we get here? Among the many ways Amazon has changed consumer preferences is its passion for customer experience. Amazon has successfully gotten us addicted to not only instant gratification, but to demand a frictionless returns process everywhere we shop. UPS and Comscore’s annual UPS Pulse of the Online Shopper study cite 79 percent of shoppers surveyed view a free and effortless return policy as an important factor in online retailer selection and purchase decisions. Online retailers must provide an acceptable returns policy to stay competitive.

ost people think sales and deliveries are the only key drivers of peak success, but

At three times the return rate of in- store purchases, it is clear that the huge disruption on the sell-side of our increasingly omni-channel world is matched by disruption in what happens post-sale. By offering a free, seamless returns experience, retailers all but incentivize us to buy all the sizes and styles we might possibly need, knowing we can keep the ones we want and return the balance. With no consequence of over-ordering, there is little reason to moderate our bulk-buying habits. Just as there is no such thing as free lunch, there is no such thing as free returns. To retailers, returns – or “reverse logistics” – is another cost of attracting and engaging customers.

reverse logistics can make or break a retailer’s profit goals. The surge in eCommerce, and the resulting surge in returns handling, is driving demand for dedicated processing warehouse space around the world. Online sales in the U.S. continue to grow at a steady 15 to 16 percent rate annually, and will top $500 billion in 2018. Based on historical trends, National Retail Federation (NRF) projections call for approximately 30 percent of online purchases to be returned, compared to approximately 10 percent of in-store purchases. NRF also projects approximately $350 billion in total merchandise returns between online and in-store in 2018.

According to Forrester Research, companies need to increase focus and spend on retaining existing

* All dollar amounts listed are in USD.

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