Ellie Gabel discusses how retailers are using automation, strategic partnerships, and fraud-prevention technologies to streamline e-commerce returns and strengthen reverse logistics.
The e-commerce boom has made it easier than ever for people to buy virtually anything without leaving their homes. The convenience can bring downsides, however, because it is not always easy to assess a product online. This challenge means many retailers face significant upticks in returned items, forcing them to develop or improve their reverse logistics strategies.
Automated systems ease struggles for sellers and customers alike. What should experts consider when designing them?
Increasing convenience with partnerships
Even the best automated systems only succeed when they are useful. Installing them in the most convenient places for large percentages of shoppers is a practical way to increase overall engagement. In one recent case, Amazon placed some of its return kiosks in select Goodwill locations throughout Seattle, Washington.
Customers can bring their Amazon returns there, which reportedly increases foot traffic for the partner locations. One reporter who tried this system received a 20% off coupon for Goodwill while interacting with the kiosk. They also saw a prompt to donate to that location.
This example shows that building the return automation is only part of the goal. The involved parties must also assess the best ways to encourage customers to interact with it. Most are much more likely to do that when it is convenient, and some feel even more compelled when they receive discounts or other perks.
Community partners are similarly more agreeable to having automated return technologies in their locations if there is a clear benefit to them. In this instance, customers may specifically visit Goodwill locations because they are the easiest places to send back items ordered from Amazon. Getting people in the door is the first step in encouraging them to buy something they might not have considered otherwise, especially if the return kiosks give them a coupon.
Investigating internal improvements
Building effective systems to process e-commerce returns also involves examining the processes of the entities handling the goods and understanding when to invest in specific equipment that could save time. Many companies use conveyor belts to optimise material handling. They reduce the time workers spend walking through sprawling warehouses because the items travel most of the distance on the belt.
Their facilities may also need systems to sort returned goods into various categories depending on their condition. Suppose a customer ordered a product online but changed their mind about it shortly after the item shipped. They might not ever open the box, making the merchandise immediately suitable for another customer.
People also return broken items or those that are missing some included accessories. Those usually require sellers to recycle the goods, discard them, or sell the products at deep discounts. Developing an automated system to sort these items could reduce error rates and allow workers to allocate more time to other tasks.
Optimising the automated equipment used internally also improves results. One common option is to add rubber or carboxylated nitrile to conveyor rollers to increase the traction between the belt and pulley. Doing so prevents problems such as belt slipping, which can slow processes and necessitate temporary stoppages.
Many businesses also automate data collection with sensors that collect information in real time and help users detect and resolve problems more quickly. Such proactiveness becomes extremely beneficial as brands address increasingly higher return volumes.
Using technology to stop return fraud
Although most buyers return items for legitimate reasons, a minority does so fraudulently, resulting in extra headaches for retailers. Consider an example where someone purchases an outfit and tucks the tags into the collar so they can wear it once and return it immediately afterward. Sending it back with stains or odors could make it unsellable.
Some companies have begun using technologies like artificial intelligence and data analytics to distinguish between honest customers and those who may take advantage of their return policies. Rather than relying on those innovations alone, many executives find it works better to add a human touch by using employees to take detailed notes about the bad actors. Technology can then supplement this approach by determining if the majority of fraudulent returns originate from a specific region or possess other identifiable characteristics.
Some parties taking this approach recommend training the associated algorithms to think as humans do and equip them to ask the right questions at the appropriate times. Data sharing among e-commerce brands also helps maintain transparency and visibility, reducing the likelihood that individuals attempting to return items fraudulently will succeed.
Adapting to an evolving situation
Parties interested in bringing automation to reverse logistics should find these real-world examples inspiring. While considering how to adopt them and when, these decision-makers should continually assess the unique factors affecting their entities and workflows and adjust their plans accordingly for the best results. They must also include automated systems in their budgets, calculating the costs associated with equipment, software, training, and external support.
