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As e-commerce and b2b sales continue to rise, so do the cost of merchandise returns. Sales in the US exceeded projections by the National Retail Federation (NRF) to hit $4.583 trillion overall in 2021, with more than $1 trillion of that from online sales. On the flip side, a 2022 report by NRF concludes that return of goods purchased online increased to about $218 billion last year because of this high sales growth[i].
One of the most effective ways to recoup money from returned merchandise is Reverse Logistics. Simply put, reverse logistics enables companies to recover value from returned goods, or properly recycle or dispose of them.This helps reduce costs, maintain an efficient flow of goods, create value, and decrease risks.
Reverse logistics technology is critical for businesses that want to establish themselves as leaders in circular economy and customer satisfaction. A 2022 study by Research and Markets indicates that adopting a circular economy and reverse logistics technology leads to increased profitability, greater customer satisfaction, improved brand image, enhanced sustainability, reduction of waste, and faster and better service[ii]. The circular process of supply chain management involves various steps—such as processing returns, maintaining the movement of goods, recycling, refurbishing, and reselling—all requiring complex logistics management.
Hence reverse logistics, which employs advanced technology like artificial intelligence (AI), tracking capabilities, and digital twins to enable more efficient, cost-effective management of complex logistics flows. For some businesses, it can be a challenge to transition to a more lucrative circular economy, and the complex logistics may seem daunting. Thus, Logistics Advisory Services from LJM Group can be a game-changer. LJM uses the latest technology with cutting-edge programs combined with over 30 years of expertise in shipping, parcel, and supply chain management.
Turn the return into an opportunity to connect with your buyers. According to Mark Mathews, NRF’s Vice President of Research Development & Industry Analysis, “While retailers have indicated that they are seeing an increase in items returned to stores and online, the upside is that it also provides them with additional opportunities to connect further with customers and provide a positive experience.”[iii] Many companies use returns as an opportunity to engage customers and expand business. For example, Apple offers return and upgrade services for older cell phones, enabling them to automatically upsell. H&M clothing company accepts gently used clothing from any brand. Every merchandise return should be considered an opportunity to strengthen customer relationships, upsell, and gain insight on how to expand your business.
More and more buyers also view reverse logistics as a green solution that helps recycle, refurbish, and properly dispose of returned goods. Current research emphasizes the importance of reverse logistics to businesses that want to position themselves in the market as eco-friendly leaders in a circular economy.[iv]
Reverse logistics is a powerful way to brand your company as technologically advanced, customer-focused and eco-friendly, while improving your profitability and efficiency. To learn how more about how reverse logistics can help your business cut costs and boost customer satisfaction, visit myljm.com or call 631-844-9500.
[i] Retail Returns Increased to 761 Billion in 2021 as a Result of Overall Sales Growth, National Retail Federation, January 2022: https://nrf.com/media-center/press-releases/retail-returns-increased-761-billion-2021-result-overall-sales-growth
[ii] Trend Opportunity Profiles – Reverse Logistics in a Circular Economy, Research and Markets, February 2022: https://www.researchandmarkets.com/reports/5561820/trend-opportunity-profiles-reverse-logistics-in?utm_source=CI&utm_medium=PressRelease&utm_code=bct4ws&utm_campaign=1679745+-+Reverse+Logistics+Markets+in+a+Circular+Economy%2c+2022+Research+Report+-+Opportunities+in+End-to-End+Supply-Chain-as-a-Service%2c+Specialists%2fNiche+Solution+Providers%2c+%26+Sustainable+Subscription+Models&utm_exec=chdo54prd
[iii] Retail Returns Increased to 761 Billion in 2021 as a Result of Overall Sales Growth, National Retail Federation, January 2022: https://nrf.com/media-center/press-releases/retail-returns-increased-761-billion-2021-result-overall-sales-growth
[iv] Global Reverse Logistics Market 2022 to 2027, PR Newswire, 1 March 2022: https://www.prnewswire.com/news-releases/global-reverse-logistics-market-2022-to-2027—industry-trends-share-size-growth-opportunity-and-forecasts-301493140.html
Reverse Logistics Markets in a Circular Economy, 2022 Research Report – Opportunities in End-to-End Supply-Chain-as-a-Service, Specialists/Niche Solution Providers & Sustainable Subscription Models, NPR Newswire, 4 April 2022: https://www.prnewswire.com/news-releases/reverse-logistics-markets-in-a-circular-economy-2022-research-report—opportunities-in-end-to-end-supply-chain-as-a-service-specialistsniche-solution-providers–sustainable-subscription-models-301516601.html