With the shift to remote and hybrid work models in recent years, people are spending more time at home, and many are choosing to do their shopping from home as well, which has caused eCommerce sales to increase drastically since 2020. While this has benefited many online retailers, it has also caused a number of problems as these companies try to navigate an increasingly complex supply chain. Handling returns can become particularly overwhelming for online retailers as an estimated 20-30% of online purchases are returned.
This makes it essential that eCommerce companies fine tune their reverse logistics processes to enhance their efficiency and provide a better customer service experience. Reverse logistics is a supply chain management system used to organize the return of products to their origin-destination. Reverse logistics software has become an increasingly vital part of this process, as it helps streamline the process of returning goods while minimizing the costs and potential losses associated with handling returns.
Yet, if your eCommerce business is still handling reverse logistics manually, you may find yourself wondering what reverse logistics software is, how it works, and whether it is truly a worthwhile investment. Keep reading as we take a deeper look at reverse logistics software and the benefits it could bring to your company.
What is Reverse Logistics Software?
Reverse logistics is the process of moving goods back upstream through the supply chain to return them from the end customer back to the retailer or manufacturer. The main difference between reverse logistics and traditional logistics is that while conventional logistics revolves around the onward transportation of goods from manufacturers to consumers, reverse logistics revolves around the process of moving goods backward through the supply chain from the consumer back to the manufacturer or other junctures along the supply chain.
As any online retailer knows, the reverse logistics process can be quite complex as you try to handle everything from product returns to warranty requests and manage the return of goods through the supply chain; this is where reverse logistics software comes into play. Reverse logistics software is a specialized technology that is designed to manage the processes and operations involved in handling product returns, exchanges, repairs, and refurbishments, as well as other aspects of the reverse supply chain. Its sole purpose is to streamline the movement of goods from the customer to the manufacturer or supplier with the goal of optimizing this process to maximize efficiency and reduce costs. The right reverse logistics software can help organize, automate, and track every step of the reverse logistics process, helping to reduce the burden reverse logistics can put on retailers.
While reverse logistics software often makes retailers think of the returns management process, this software is vital to numerous processes that make up the reverse supply chain. Here is a look at just a few of the components of the reverse supply chain that reverse logistics software can help you manage:
Returns Management
Reverse logistics software plays a critical role in facilitating the returns management process by tracking and managing returned products and recording relevant data such as the reason for the return and the item’s condition. With returns being such a large component of the online sales process, reverse logistics software can be integral in reducing the cost of returns as well as in improving customer satisfaction with the returns process.
Remanufacturing or Refurbishment
This process involves repairing and rebuilding returned or used products to like-new condition for resale or reuse. Retailers may also use components from a defective device that cannot be refurbished and use them elsewhere. This process can help save money and prevent unnecessary waste. Reverse logistics software can help facilitate this process by tracking goods and their condition.
Unsold Goods
If a retailer cannot sell goods to consumers, either due to low demand or overstocking, they may return these products to the manufacturer or distributor. Reverse logistics software can help streamline this process and reduce the costs associated with handling and transporting unsold goods.
Delivery Failure
In an instance where a product cannot be delivered, such as if the customer was not present to sign for the package or the address was wrong, the product may be shipped back to the retailer or a fulfillment center. This process can become costly if multiple delivery attempts have to be made to get products to the consumer. Fortunately, reverse logistics software can be used to help identify why deliveries are failing and help correct the problem.
Rental Equipment
Reverse logistics software can also help facilitate the management of rental equipment. At the conclusion of a rental or lease agreement, the product is returned to the manufacturer for processing, refurbishment, redeployment, or recycling. Reverse logistics software can help track these products and their movement through the reverse supply chain.
Repairs and Maintenance
Some companies offer warranties on their products that require the customer to send the product to the business to be repaired, serviced, or replaced under the terms of the warranty. Reverse logistics software can play a critical role in this process by not only facilitating the movement of these items, but also by making it easy for customers to request repairs and track the status of the repair process.
How Does Reverse Logistics Software Work?
Reverse logistics software works by leveraging the latest technology to streamline and automate many aspects of the reverse logistics process. Depending on your industry and the needs of your business, your ideal reverse logistics solution may include software that handles returns management, tracks and organizes inventory, fleet management software, and data analytics software. The goal of reverse logistics software is to streamline the reverse logistics process by automating key tasks such as initiating returns, tracking vehicles and packages, and managing inventory to reduce the financial burden reverse logistics management can place on an online retailer.
The Benefits of Reverse Logistics Software
Handling returns and other components of the reverse logistics process can be a pain point for many online retailers. Fortunately, the right reverse logistics software can help you meet these challenges by streamlining the reverse logistics process, saving you money while improving the customer experience. If you are unsure whether investing in reverse logistics software is right for your company, here is an overview of some of the benefits doing so could provide:
An Improved Customer Experience
Reverse logistics software can help make the returns process simpler and more transparent, enhancing the customer experience. The fact is that when customers experience hassle-free returns, their trust in a retailer goes up, leading to customer retention and brand loyalty. While many retailers underestimate the importance of offering a simple returns process, over 80% of customers say they will switch to a competitor after having a bad return experience. Reverse logistics software can then be integral in helping you retain customers by providing features buyers want such as self-service returns and returns tracking.
Increased Efficiency
Reverse logistics software can save time and money by ensuring returned goods are integrated back into the system efficiently. From automating the returns authorization process to routing returns efficiently through the reverse supply chain, this software can help streamline reverse logistics, helping to reduce the financial burden the returns process can create.
Reduce Losses
Another benefit of optimizing the reverse logistics process with technology is that this can reduce losses and increase revenue. Reverse logistics software can analyze the reasons for returns, leading to improvements to your products and listings that will increase customer satisfaction and reduce return rates. Additionally, by requiring your staff to thoroughly inspect and catalog returns, your reverse logistics software can help reduce instances of returns fraud and identify products that can be refurbished and resold. This software can then go a long way in reducing the losses associated with product returns.
Sustainability
One of the biggest advantages of effective reverse logistics software is that it can help support your company’s sustainability initiatives. As more emphasis is placed on sustainability and finding ways to reduce carbon footprint, reverse logistics software provides an opportunity for eCommerce companies to be more environmentally friendly, improving their brand image. Reverse logistics software does this by providing new data about your returns that can help you minimize returns before they happen, identify resale and repair opportunities, and properly recycle products that can’t be repurposed, reducing waste as well as the environmental impact of the returns process.
On-Demand Tracking and Analytics
A lack of data is one of the biggest reasons why many eCommerce companies have inefficient and costly reverse logistics processes. Investing in reverse logistics software can give you the data you need to spot problems in your reverse supply chain by gathering and delivering returns data and tracking inefficiencies. You will get visibility into the returns journey that can help you pinpoint and correct inefficiencies to save time and money. This software can also provide you with valuable data on returns patterns that can help you make adjustments to product listings, descriptions, and sizing charts to reduce returns rates.
Key Features Your Reverse Logistics Software Should Have
Looking at the benefits reverse logistics software can provide, it is no wonder why so many businesses are choosing to incorporate these solutions into their reverse logistics operations. Yet, the term “reverse logistics software” is pretty broad, and there are numerous reverse logistics solutions on the market that offer different features and benefits to retailers.
If you’re considering investing in reverse logistics software for your company, it is important that you take the time to research available solutions to find the right product that meets your needs. As you research available products, here are the key features you should look out for in quality reverse logistics software.
Automated Returns Management
Your reverse logistics software should take the hassle out of returns by introducing automation to the process. Your reverse logistics software can automate the return authorization process, helping to save you time, reduce return delays, and improve customer satisfaction. It can also provide real-time tracking and automated communication throughout the returns process to ensure visibility and transparency. Automated tracking updates also can reduce your internal staff’s workload, as they will not have to field questions from customers wondering about the status of their return.
Inventory Management
As your eCommerce business grows, keeping track of returned inventory can feel like an overwhelming process. Fortunately, the right reverse logistics software will provide robust inventory management capabilities that will simplify the inventory management process. This software can also help you make informed decisions regarding the refurbishment, restocking, or disposal of returned products. Reverse logistics software can then help you better manage your inventory to improve operational efficiency, maximize sales, and reduce storage costs,
Data Analytics and Reporting
As we previously mentioned, data can be critical in helping you make decisions to improve not only the reverse logistics process but also the overall customer service experience you provide. It is then important that you choose reverse logistics software that provides data analytics and reporting tools that identify and make sense of patterns that are leading to product returns. This data can give you the knowledge you need to implement strategies for product improvement, customer education, and process optimization that can help reduce returns and improve customer satisfaction. Comprehensive data and in-depth reports can also help you find ways to improve your reverse logistics process and better handle returns in the future.
Integration Capabilities
Perhaps the most important feature you should look for in reverse logistics software is the ability to integrate it with your existing ERP, CRM, and eCommerce system to create a unified platform that runs seamlessly. When all of your critical systems work together, this enhances collaboration among teams, improves data entry, and facilitates the automation of time-consuming manual processes to boost efficiency.
A Customer Portal
Online shoppers today expect to be able to handle the returns process themselves online. Your returns management software should then be able to help you meet customer expectations (while expediting the returns process) by providing a branded portal where customers can initiate the returns process themselves, print a return label, and track the status of their return and refund. This helps streamline the returns process while enhancing the customer experience.
Dive deeper into the world of reverse logistics by downloading our latest white papers for free!
Case Study: Early Adopters of Returns Automation
This in-depth case study analysis explores how Elite EXTRA Returns Automation has improved returns operations for numerous early adopters!
White Paper: The Reverse Logistics Hassle
Discover the challenges involved with last mile product returns and learn how you can solve the reverse logistics hassle.
Why You Should Choose Elite EXTRA’s Returns Automation Software
When it comes time to choose reverse logistics software for your eCommerce company, it is essential that you take the time to find the right solution that will help streamline the reverse logistics process, improve customer satisfaction, cut costs, and drive growth. The fact is that while reverse logistics and returns management can be time-consuming and costly, the right software can streamline this process, allowing you to invest more time and money into your core business.
If your company is looking for reverse logistics software that will simplify the returns process, look no further than Elite EXTRA’s industry-leading Returns Automation software. Partnering with Elite EXTRA can help streamline your reverse logistics operations by simplifying and automating the returns management process. With a user-friendly interface, customization options to meet your business’s needs, and the ability to integrate with your existing systems, our software will not only make things easier for your team, but it will also make the returns process smoother, improving customer satisfaction.
Check out our latest case study to discover how early adopters of Returns Automation are saving over $270,000 a year in annual returns.
Or, contact us today to find out how Elite EXTRA can help simplify the product returns process for you and your customers.
Sources
https://www.trade.gov/impact-covid-pandemic-ecommerce
https://www.richpanel.com/ blog/ecommerce-return-rates
https://www.klarna.com/ international/press/retailers-risk-losing-loyal-customers-if-they-get-returns-wrong-klarna-warns
https://hbr.org/2023/09/ research-consumers-sustainability-demands-are-risinghttps://www.forbes.com/ sites/joanverdon/2022/12/14/816-billion-in-returns-expected-this-year-retail-group-reports/
