But in the real world, errors can happen and not everyone likes what they bought when they actually have it in their hands. From human errors in picking orders to wrong shipping labels applied to boxes, even the best logistics plans can face uncertainty. And, with so many companies offering free returns and shoppers comfortable returning goods simply on buyer’s remorse, a perfectly processed shipment can still result in returned goods.

That’s where reverse logistics services come in: returning items from the customer to the seller with the goal of managing final disposition. As customers demand more flexibility, it’s now more important than ever to consider how reverse logistics fit into your overall merchandising strategy. 

What is Reverse Logistics?

The term “reverse logistics” was first coined in a 1992 whitepaper by the Council of Logistics Management (now the Council of Supply Chain Management Professionals). The author revisited the topic in a 2002 article published in Harvard Business Review, writing: “There are many reasons for this trend—the rise of electronic retailing, the increase in catalog purchases, more self-service in stores, lower tolerance among buyers for imperfection—but few companies are doing the best job of dealing with it.”

The article went on to note that reverse logistics could actually be an opportunity for a positive customer experience and returned merchandise could become a profit center. In short: Every business that ships goods directly to the customer needs a reverse logistics plan.

It's Not Just Logistics in Reverse

Gone are the days of the “appeal process” when returns required careful consideration by a live human and a formal authorization, including an exchange of documents. Technology has simplified and accelerated the entire process. In fact, some retailers include a return shipping label with the merchandise for “no questions asked” reverse logistics that inspires repeat business.

This can avoid excessive shipping costs, assuring that the lowest cost transportation is used. In addition, eliminating bureaucratic steps reduces the manpower costs. Much less effort should go into getting the merchandise back than getting it out to the customer in the first place.

And, there are more savings to be had once the goods are back in your hands. Yet, despite the advances in providing a much more customer-focused approach, some companies are still doing reverse logistics the old-fashioned way – and quietly losing money as a result.

The Benefits Re-Focusing the Reverse Logistics Strategy

Today’s reverse logistics doesn’t require a staff of hundreds of people processing returns to determine their final disposition. Instead, a re-engineering of reverse logistics services can save a company time, manpower and shipping costs.

By utilizing a technology-enabled approach to reverse logistics, the returns process starts with an automated form leading the goods down a guided path that effectively pre-sorts items before they are inspected for disposition. Through this pre-screening process, companies can significantly save on shipping costs and realize maximum value from returned goods.

Once the technology determines where the item is destined, a return merchandise authorization form and shipping label with the most cost-effective means possible is automatically produced. This sends the item to the appropriate return center, where a quick inspection can confirm the item condition and bundle it with other items on an LTL load. Utilizing technology, the company reduces the number of trucks required for shipping, resulting in actualized savings.

A process that once involved several steps becomes a streamlined solution. Technology-enabled management of the reverse logistics intake process frees your workforce to focus on value-driven tasks, giving you optimal productivity.

The Downside of an Advanced Strategy

Of course, there are still challenges in an automated reverse logistics strategy. While technology is a great customer service enabler, downsides can emerge as well. Chief among them is fraud mitigation.

For example, there’s the case of the 22-year-old Spanish citizen arrested in 2019. Instead of returning items, the scam artist weighed each box with items inside, and filled them to the same weight with dirt. He was accused of taking over $370,000 in fraudulent returns from a major online retailer.

In this situation, the reverse logistics process experienced an unforeseen issue. Automated “inspection” prior to disposition resulted in widespread fraud and abuse. This is where the power of a trusted third-party logistics provider (3PL) comes in. Through deep analysis of costs, benefits, gains and weaknesses, you can implement an advanced reverse logistics process that anticipates the full range of real-world situations.

How To Get Your Company Ready For Advanced Reverse Logistics 

If your reverse logistics process could benefit from a technology boost, it might be time to get a parcel program assessment from the leader in 3PL management: Transportation Insight. As your partner in transportation management, we can help you start preparing or fine-tuning reverse logistics services that utilize technology to give you the competitive edge.

Contact us today and get started on a strategy that prepares you for the future.

Shipping used to be a linear exercise. A manufacturer shipped products to a distribution center. From there, the products were delivered to stores who handed them to customers.

But this linearity is a thing of the past. So is the shipper’s control of the supply chain. E-commerce has spawned the omni-channel fulfillment model where orders, distribution and deliveries occur from anywhere at any time. The traditional supply-push scenario with shippers calling the shots is giving way to a demand-pull approach with consumers driving the transaction.

The BOPIS (meaning “Buy Online, Pick Up In Store”) concept has become a key part of the asymmetrical, demand-pull world we now live in. Consumers order an item on an electronic device, compelling a retailer to immediately pick and pack the product at one of multiple locations and have it ready for the consumer’s arrival within hours.

Customer Experience Depends on BOPIS Shipping Excellence

While the COVID-19 pandemic accelerated the adoption of BOPIS retail operations, they are now a fixture of omni-channel fulfillment. To execute an effective BOPIS shipping strategy, suppliers must understand retailers’ two overarching objectives:

• Ensure a seamless customer experience regardless of the order touchpoint
• Maintain adequate in-store inventory while expanding digital buying opportunities

As SupplyChainBrain puts it: “A BOPIS strategy fortifies a shipper’s brand equity by consistently satisfying the retailer’s replenishment needs.”

It is essential for retailers to have the right goods always available, at the right place at the right time for the consumer. The “right time” could involve shipping to a residence or to another physical location. It could mean an in-person brick-and-mortar sale. It could mean BOPIS. Or, it could be a drop-ship model where the supplier delivers directly to the customer on behalf of the retailer, thus minimizing the need to hold inventory in a space-constrained facility like a store or warehouse.

Striking the correct balance between in-store and digital inventory is just as critical. In-store customers are typically more loyal and buy more per visit than online customers. Retailers are loath to broaden their digital channels if it threatens to siphon off in-store activity. On the other hand, BOPIS retail offers a way to get online shoppers into the store where they might increase the value of their purchase by buying accessories or additional merchandise.

Maximizing the value of both scenarios requires visibility and analytics tools. Per TotalRetail magazine, to address the challenge of balancing inventory and gaining visibility for effective and efficient BOPIS retail pickup programs, retailers are increasingly turning to automated technology solutions.

A clear line of sight across the ecosystem allows shippers to align production with retailers’ systems and replenishment needs. Analytics like Machine Learning and Artificial Intelligence also provide shippers with vital clues about consumers’ future buying habits so they and their retailer partners can stay a step ahead.

Seasoned third-party logistics specialists can empower shippers to take full advantage of these information systems to manage a consistently successful BOPIS shipping program that leverages cost-effective automation. They work extensively with all stakeholders, and can quickly adjust the go-to-market processes to optimize outcomes and avoid costly missteps.

Final Delivery Drives Loyalty or Brand Damage

Online fulfillment is a fast-paced, often unforgiving business. You are only as good as your last delivery. If a customer's purchase isn't ready for the promised, rapid in-store fulfillment, the BOPIS retail strategy could have a negative result.

The margin for error narrows further in a BOPIS retail transaction. If a customer makes a trip to the store only to discover a stock-out, it can seriously damage both brands, especially if a negative review spreads on social media.

The good news for shippers is that providing the convenience that gives BOPIS meaning should result in enduring brand loyalty from consumer and retailer alike. Consumers prize convenience, and will favor retailers who make the BOPIS retail experience as easy as “pulling up and popping the trunk.” This goodwill extends to the products they pick up and take home.

What customers know, and will remember, is how, when and where they received their product. Or why they didn’t. That is how your brand will be remembered. Shippers who understand BOPIS shipping to consistently help retailers execute will become sticky to the retailer. In today’s world, logistics—more than any part of a shipper’s business—is becoming the competitive differentiator.

Navigate the New “Never Normal”

Planned properly, the BOPIS retail fulfillment model is a valuable tool in the highly competitive e-commerce space.

The devil is in the execution. Transportation Insight specializes in designing and executing supply chain strategies that empower you to provide the final mile delivery options required to wow end-customers.

We created “The BOPIS Revolution: Navigating the New Never Normal” to offer insight into the many variables involved in meeting consumers’ evolving demands for service. Read it today to understand the strategies that we can help you leverage to enhance customer service, grow market share and increase competitive advantage.