The movement of merchandise from the manufacturer to the final consumer has always been the focus of cross-border logistics and eCommerce stakeholders. But on the flip side, these players often neglect scenarios where goods require returns, thus, negatively impacting customer satisfaction.
The return process (reverse logistics), which eCommerce stakeholders often regard as a burden, can be harnessed as a tool that strategically benefits their business in several ways. This post delves into the intricacies of reverse logistics and its impact on cross-border eCommerce.
More than two years after the world stood still and the pandemic was in full swing, global eCommerce continues to grow significantly. In 2022, global eCommerce sales worldwide are valued at $5.545 trillion, up 12.8 percent from the preceding year. This signifies that several consumer pandemic behaviors have come to stay as the world transits to a new normal.
Correspondingly, cross-border eCommerce is also witnessing a s that projections estimate a 712 percent growth from 2018 to 2027 in the segment. It implies that as cross-border eCommerce expands, logistics stakeholders need to be ready to cater to the demands of the growing consumer base. And returns, which are inevitable in this niche market, require robust implementation.
Despite the disruption in the supply chain brought about by the pandemic, various customer surveys reveal that online shoppers still desire free and fast deliveries. We can place a wager that the same applies to product returns (reverse logistics). Delays in deliveries and shipment led to over 56 percent of consumers leaving a retailer for another.
As we had earlier highlighted, reverse logistics is the process of handling returned goods after they have reached their final destination and processing them for other purposes (reuse or recycle). It is basically the opposite of the logistics process, where goods move from the end-user, making their way back to the manufacturer or eCommerce brands for returns, replacement, or other reasons.
Consumers may be more familiar with reverse logistics from a returns viewpoint since it is closely related to the return policy of an eCommerce outfit. When effectively administered, reverse logistics can be a significant factor in positive customer satisfaction; thus, eCommerce outfits and logistics stakeholders must develop workable policies and invest in the proper infrastructure to facilitate the entire process and reap the benefits of reverse logistics.
Although we equate reverse logistics to the return policies of an eCommerce brand, especially from the consumer viewpoint, reverse logistics is more complex than that. Understanding why reverse logistics occurs in the first place gives enthusiasts a better understanding of what reverse logistics really means.
Customers may want to seek returns due to defective items, delivery failure, repairs, recycling, or even disposal due to the end of the product’s lifespan. These consumer actions require that the manufacturers take certain steps to ensure customer satisfaction while deriving maximum value from the items by either refurbishing or even remanufacturing.
In reverse logistics, goods move from the point of origin (customer) either by drop-off or pickup (with a 3PL service provider) to a manufacturer fulfillment center, where it undergoes inspection for the next processing step. The processing may include one of the following: refurbishment, recycling, or even disposal, depending on the inspection outcome. Once the manufacturer establishes the outcome, the good makes its way to a final point, where value is derived.
Reverse logistics brings immense worth to all eCommerce stakeholders. And we can summarize some of these values from the following perspectives.
● Improved ROI: Reverse logistics creates a value-added system for the entire supply chain, enabling manufacturers or eCommerce brands to get better returns on their investments.
● Nurturing Positive Environmental Impact: By adopting sustainable practices to the production process either through; reusing, refurbishing, or recycling items, eCommerce and other logistics stakeholders can go further towards achieving sustainability targets through mitigating severe environmental practices.
● Mitigating Losses: A survey found that almost 30 percent of eCommerce sales were returned in the sector, with an approximate cost implication of $101 billion. eCommerce players can adopt reverse logistics practices to cushion the financial impact of unavoidable returns.
● Better Product Life Cycle: Refurbishing and remanufacturing components of reverse logistics enable brands to extract more value and utility from their products instead of just channeling them to waste sites and landfills.
● Customer Retention and Satisfaction: Perhaps the most crucial gain from reverse logistics for eCommerce participants is its role in customer satisfaction. Surveys have shown that customers who are happy with an eCommerce outfit’s return policy are 95 percent likely to buy from the same retailer, signifying that eCommerce brands can utilize reverse logistics to build brand loyalty and nurture customer loyalty lifetime value.
Getting products from manufacturer to end-consumer is just half of the eCommerce journey. eCommerce brands and their logistics partners must be ready to account for uncertainties in the supply chain and consumer preferences by delivering seamless return procedures that help boost customer satisfaction. That way, they can reap the gains in terms of finance and reputation that a satisfied customer brings.
Whether drop-offs or last-mile logistics services, eCommerce brands must partner with a reputable third-party logistics service provider that understands the importance of returns and has the requisite infrastructure to provide reverse logistics services. YunExpress, an internationally reputable cross-border logistics service provider, is that ideal partner.
YunExpress is a cross-border logistics service provider dedicated to postal parcels, international express, cross border B2C business lines, and fulfilled by Amazon transfers. With over 60 global partners, YunExpress ensures quick and quality deliveries on each package. Visit YunExpress to begin your cross-border journey.
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