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With UK retail now well into the golden quarter, many organisations will already be working very hard to stay ahead of demand, including coping with the challenges posed by the inevitable surge in returns. Blue Yonder’s Tim Robinson examines
- The struggle to manage returns can have a knock-on impact across a retail business
- 84% of consumers will stop shopping at their favourite shop if stricter returns policies are implemented
- Retailers should capture data at every stage and can treat returns as part of core planning
The challenges are significant. Returns surge during peak retail seasons and can overwhelm warehouse space and teams. In some cases, retailers may need to find extra space and budget for additional overtime just to handle incoming goods.
For those relying on manual processes, the additional strain this puts on resources and processes can easily lead to errors and risk merchandise ending up in landfills.
In fact, the struggle to manage peak season returns can have a knock-on effect elsewhere, even disrupting outbound operations. Put all this together, and returns can take a big bite out of the bottom line.
Clearly, something has to give, and retailers aren’t alone in wanting a better way to handle returns.
How do consumers feel about returns?
Recent research by Blue Yonder found that consumers are increasingly turning to retailers that offer more environmentally sustainable solutions and greater transparency. More specifically, 84% of consumers say they will stop shopping at their favourite retailer if stricter returns policies are implemented.
Nearly two-thirds are concerned about the environmental impact of returns, and nearly three-quarters say they won’t return products if they suspect items will go to landfill.
How do we move from waste to value?
So, what are the options for retailers looking to take a fresh look at how they handle returns? Firstly, in most organisations returns don’t have to be a write-off, and there are excellent opportunities for improvement.
For example, most retailers allow customers to initiate a return, but fail to use the associated process data effectively across the full lifecycle. In addition, different departments often manage separate customer touchpoints, making returns inefficient and expensive.
Instead, retailers should capture data at every stage, including the reason for return and the condition of the products on receipt.
In this context, unified, interoperable data shared across divisions and partners enables smarter routing decisions. This also helps determine whether an item can be resold at full price or must go to recommerce or salvage.
Why can data help?
Better data can reduce the growing reliance on ‘just keep’ it policies.
Currently, 60% of consumers report being told to keep a product rather than return it. While ‘just keep it’ may be cost-effective for low-value items, access to smarter data helps determine when it makes sense and when it doesn’t.
These deeper, more meaningful insights, including tracking customer behaviour, can also help inform policy adjustments and reduce unnecessary losses.
Armed with this change in approach, retailers can treat returns as part of core planning. Bringing them into inventory forecasting helps teams understand what is coming back and why, informing merchandise and product decisions. AI can also help speed processing and route items to the best resale channel.
Consumers are also embracing more circular models, demonstrated by the rise of peer-to-peer platforms such as Vinted.
Bring all these opportunities together, and retailers that act now to treat returns as a profit driver will recover more value and strengthen customer loyalty.
For further information on how you can unlock the hidden value in returns click here.
Tim Robinson, Senior Vice President, Returns, Blue Yonder.
