Returns in the eCommerce Retail Supply Chain

Introduction to Ecommerce Supply Chain

When a customer places a return on your platform, they may have just to make a few quick taps. But, in the backend of the ecommerce supply chain, massive efforts have to be made to fulfill this customer request seamlessly. In this article, we will learn how returns drive the supply chain in ecommerce.

The primary aim of setting up or using an ecommerce supply chain is to make deliveries quicker and easier. However, with the increasing demand for better returns and customer experience, the companies have to focus a lot more on optimizing the use of this supply chain to their benefit.

Efficiency is the key to a successful business, irrespective of the sector. Maximum efficiency is achieved when a workflow is designed to accommodate every step and exception that will likely arise in the process without much effort. Setting up an ecommerce supply chain can be a complex and expensive process.

The ecommerce supply chain’s primary goal is to deliver a product from the warehouse to the customer’s doorstep. With the advancements in technology and the cut-throat competition in the market, multiple companies can use the same supply chain network to cater to the needs of their customers.

1) What is a supply chain, and how does it work in ecommerce?

The supply chain is the system of networks of resources and technologies that work together to facilitate the creation and sale of a product or service. The supply chain is a complex network of warehouses, distributors, transportation companies, and retailers in the modern world. The ecommerce sector has one of the most widely spread supply chains. 

The use of technology is advent in the field, and you have to work on multiple fronts to ensure the supply chain can fulfill the customers' needs. Ecommerce businesses use 3rd-party partners. These 3rd-party partners are experts in their fields and allow companies to focus on their platforms.

The logistic supply chain is an essential aspect of the ecommerce supply chain. Ecommerce companies partner with multiple logistic companies to increase their reach and ensure a smoother delivery experience.

While the delivery of a product from a warehouse to the customer’s doorstep is a comparatively linear process, the process of reverse logistics poses a challenge to most of the 3PL partners.

Returns are essential for a holistic ecommerce experience. Therefore, the inclusion of returns management in your supply chain management strategy is vital to the survival of your business.

2) How to manage returns for your ecommerce business?

Management is the key to a successful business. In the ecommerce sector, the returns process can impact the bottom line of your business. Implementing proper product returns management software can reduce the impact while enhancing your customer experience and retention rate. Here are some ways you can manage your returns without disturbing your fulfillment operations.

2.1) Incorporate Returns as a part of your primary supply chain

If you wish to include a seamless returns experience to your customer, you must include it in your primary supply chain. This makes it easy to have an efficient returns process and a hassle-free returns experience.

2.2) Optimize Returns Process

You can use third-party returns management software like ClickPost to get an insight into your returns. Try to reduce these returns by ironing out the customer and business pain points to minimize the losses.

2.3) Make your warehouse return-friendly

If you use a warehouse management service or your fulfillment center, establish workflows to make the restocking and quality check processes more efficient.

3) What is the importance of Returns in the supply Chain of ecommerce?

The ecommerce sector is constantly evolving, but one thing is at the center of every change – customer experience. The ability to return a product is the critical booster that help the customers trust a website. Therefore, returns have a considerable impact on dictating the quality of customer experience.

Along with this, the returns process is a high engagement activity that allows businesses to push their products to the customer. Considering this impact and the importance of the returns experience on an ecommerce platform, adequate attention is paid to the returns process.

The supply chain uses the perfect blend of technology and process optimization to attain its goal. In such situations, the procedures are designed around the process where more exceptions are excepted.

The ecommerce returns process involves numerous dynamic interactions, including return pickup, quality check, refund processing, etc. The ecommerce company already loses the sale in case of a return. Hence, the ecommerce returns process has to be optimized for maximum efficiency to minimize losses.

As the company starts to reduce the distance the product travels to be restocked, it optimizes the delivery speed in the supply chain. Therefore, we can say that, in a way, Returns drive the supply chain in ecommerce.

Providing a seamless returns experience is more than just a better customer experience. It has several other benefits. Since the returns process is a high engagement period, you can use it to push personalized product recommendations based on the consumer's search history.

Additionally, incorporating a feedback mechanism in your returns process can provide valuable insight into product perception and consumer behavior.

Therefore, ecommerce businesses have started focusing on the returns experience. As a result, the handling and management of returns have gained importance in the supply chain.

Returns have become an integral part of the supply chain of ecommerce because the returned product can be resold. To cut down on the losses on the return, the product must be reimbursed in the inventory as soon as possible.

The time frame needed for restocking is essential for products with high market demand. Most companies issue refunds after the product is assessed by their warehouse team. Thus, the returns process needs to be as optimized as possible to maintain the quality of customer experience.

4) The Impact of Returns on Inventory levels and Stock Management

When a product is returned, it has to go through quality checks to check whether it can be restocked. The amount of time the product spends in the return transit journey is essentially money lost for the ecommerce business. Therefore, implementing a stock management system becomes critical in maintaining stock levels in your warehouse.

Finding a process of moving a product from the warehouse or from point A to point B in a financially and operationally feasible way is the key to a successful logistics operation. Establishing this service and supply chain network to cater to customers over vast geographical areas can be expensive.

That is why most ecommerce companies use 3PL partners that assist them in their order fulfillment process. Since businesses do not have to worry about solving the operational complexities of the logistics supply chain, they can focus on catering the shopping experience according to the needs of their consumers.

At the same time, logistics companies pour their resources into developing an optimized, all-inclusive process that allows them to cater to the needs of multiple clients.

Both the ecommerce and logistic companies have to tweak their operations and processes to cater to the evolving demands of the consumer. Technology has made it easy for ecommerce businesses to tap into the existing supply chains to deliver their products to their customers. 

But, it is challenging to manage inventory levels over other sales and delivery channels. The stock levels must be synced in real-time to avoid duplicate orders or selling products that are not in stock.

In such cases, stock management software can be an ideal solution to implement a more efficient restocking workflow at the warehouse. Therefore, ecommerce businesses have started to focus on enhancing the customer experience and bringing it as close as possible to the physical shopping experience.

5) Tips for streamlining the ecommerce returns process for your customers

Return can be a double-edged sword. If you provide a seamless returns experience, you can retain the customer for future purchases. You can suggest product recommendations based on the browsing history of the customer. If you do not have adequate control and management of the process, you lose the sale and the customer. Here are some tips to streamline the ecommerce returns process for customers.

5.1) Clear, Accessible Returns Policy

The returns policy document is like the bible. It guides your customer through the complex life of a return. A clear, concise returns policy easily accessible and visible on your platform can enhance your customer’s returns experience.

5.2) Multiple Modes of Returns

If you cannot provide free returns, you can let the customers opt for the mode of the return. Incorporate return modes, curbside pickup, in-store returns, etc., into your returns process.

5.3) Straightforward Returns and Refund Policy

You use clear, concise language to mention the terms and conditions of the returns and refunds on your platform. You can even add a loyalty program for your customers to provide a more lenient delivery and returns policy.

6) Final Thoughts

The convenience of returns had a notable influence on the growth of the ecommerce sector. As the ecommerce supply chain becomes more stable with the infusion of new technologies, returns management continues to persist as a significant issue for ecommerce businesses.

The product delivery is a relatively more straightforward process as the product has to complete a fixed journey from the warehouse to the customer’s doorstep. The dynamic factors involved in the returns process make it difficult for logistics partners to develop an automated solution in the field.

On the other hand, the ecommerce returns process is much more dynamic. The ecommerce supply chain is a vast network of fulfillment centers, distribution centers, warehouses, and logistics partners brought together by technology. Since the sector is highly competitive, the supply chain must be optimized to cater to the customers' needs.

Since returns have become a quintessential part of the ecommerce customer experience, 3PL partners must focus on optimizing the returns process. This benefits the ecommerce companies as it allows them to minimize the losses incurred during the process. That is why Returns drive the supply chain in ecommerce.

7) FAQs

7.1) How can you minimize the impact of returns on your bottom line?

Returns tend to impact the bottom line of your ecommerce business significantly. To minimize this impact, you can adopt the best ecommerce returns practices to ensure an optimized ecommerce returns process. Further, you can use supply chain management solutions to make the backend process of returns more financially and operationally feasible.

2) What is the importance of supply chain management in ecommerce returns?

The ecommerce returns process can be a complicated endeavor. Even though the company suffers losses, it is crucial to the customer experience on any ecommerce platform. Therefore, to minimize the losses, it is essential to incorporate supply chain management measures in the ecommerce returns process.