Retail Systems Magazine

“Reverse logistics is largely a function of the category you are trading in,”

says Julian Mosquera, director at LCP Consulting. “So with electronics, electrical and white goods, the level of returns is about five per cent, because people have done their research and know what they’re buying. But in fashion the online offer is raising shockingly high returns rates. Traditionally for fashion the rate was 40 per cent, but we’re hearing percentages of 60 per cent or over. The reason is, people are buying three sizes and then returning some or all of them.

”These are important issues that retailers should be tackling head on"

Mosquera continues, but he is shocked by the extent to which they are neglected by many. “Too often they just pass this on to a third party without thinking too much about it,” he says. “A third party may do the basic job, but they’re not thinking about how to provide best value for you.

"You really need to get better organised around extracting value for the business from reverse logistics, just as much as you need to think carefully about fulfilment processes.”

Retailers need strong, well-managed processes in place to ensure that returned goods are routed to the right place for resale, repair or disposal, depending on the nature and condition of the returned item. Mosquera praises technology developed by iForce, used by the likes of Tesco, where the solution is integrated within the retailer’s EPoS systems, to record and track goods returned to stores. “So Tesco know what returns they’ve got and the value of the products,” he says. “They are able to determine collection, rerouting, the recovery of the asset and the corrective actions required if it is going to go back on sale.” The key point is the speed with which the retailer is able to extract value from the returned item.

On the customer-facing side, companies need to create an infrastructure for accepting returns that works for the customer. Mosquera thinks John Lewis is a good example, with customers able to return goods by post or in stores, including Waitrose. He swears that a contact at John Lewis assures him a Waitrose store has accepted a returned mattress...

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