We’re coming into that crazy shipping time of the year and that means small business operators and supply chain managers everywhere may be pulling their hair out. Having an effective and efficient shipping strategy will keep you from going bald! However, really effective shipping strategies are not as simple as just sending your products from point A to point B. The most effective shipping strategies also include reverse logistics and return policies to help retailers make the most of their budget while keeping their customers happy even during a return or exchange. To increase customer satisfaction and gain customer loyalty, you’ll want to make sure you’re a pro at reverse logistics. Today, we’re talking about using reverse logistics to increase customer satisfaction to better optimize your supply chain.
What is Reverse Logistics?
We’ve answered the question “what is reverse logistics?” before, but here’s a refresher. Reverse logistics is essentially products and raw materials going from end consumer back to initial shipper. Reverse logistics often comes in the forms of returns, repairs, or disposal.
Some examples of reverse logistics protocols include:
- Redirecting cargo back to the manufacturer or separate facility rather than the selling business.
- Providing shipping labels or arranging the pickup of returning cargo.
- Having the capacity to repair and resell damaged products.
Obviously, these types of things are common in the retail and eCommerce world. According to WalletHub, 34% of Americans return gifts they received over the holiday season. With the holiday rush coming up, the volume of reverse logistics shipments and their importance will significantly increase after the holiday season is over.
The Goal of Reverse Logistics
Though the overall goal of reverse logistics for small business operators is to salvage value from products that would otherwise hurt the bottom line, increasing customer satisfaction is a powerful function in having a smart reverse logistics strategy. Giving customers the proper channels for when their product or shipment goes wrong to quickly remedy a bad experience helps you not just salvage the value of a lost product, but the value of a lost customer.
Optoro found in a study that 97% of consumers are more likely to be repeat customers after a positive returns experience. In fact, holiday-weary customers often take several weeks to return a product. Retailers need to be prepared for returns to occur slowly as gifts are purchased and received, and then allowing the recipient time to decide if they want to return the item. The Optoro study also found that nearly half (46%) of consumers surveyed returned between one and three gifts received during the holiday season.
Additionally, 62% of eCommerce returns are accompanied by an additional purchase. So, improving the returns process can help your business make additional sales during a return.
Reverse Logistics Best Practices
Because the majority of survey respondents stated they return holiday items within the first month after the holiday season is over, it’s even more important to consider your return policies and reverse logistics strategies early. Here are some reverse logistics best practices to consider:
- Be very clear. Clear and transparent returns policies, repairs processes, and recycling processes all play a role in an effective reverse logistics strategy and help you gain customer loyalty in the midst of a bad experience.
- Think about being flexible. Flexibility in the returns experience goes a long way with customers. Look for ways you can make sending items back easier or offer in-store drop-offs for locals. Since most consumers wait to return items for weeks, think about extending your return policy timeframe.
- Consider printing or emailing shipping labels. While many consumers prefer to return items in stores, 13% of consumers surveyed stated they prefer returning items through shipping. To help make it easier for customers to return items who can’t bring it to the store, consider offering printing or emailing a return shipping label.
- Check the returned item thoroughly. You might be able to repair or salvage certain items, which can help reduce your costs. Any items that can be repaired have the option of being resold in the future. Keep in mind, there are certain items that might not be repairable. In that case, see what you can recycle.
- Be accurate and quick. While customers might take their time deciding to return a product, they expect accurate and fast turn around in the returns process. Look at your current returns policies and data from previous years to see where you can streamline the process.
We Can Help
Looking for a third-party logistics company who can help you optimize both your traditional supply chain strategy and your reverse logistics plan? Partner with FreightCenter today. With the help of our experienced shipping agents and our powerful transportation management system, we will streamline your search for carriers and lanes and at the most affordable rates in the business. Get your reverse logistics strategy squared away for the busy holiday season ahead!