The Edge - Volume One

dispatching the goods to store shelves or a fulfillment/distribution center for future sale; selling in bulk to a discounter or jobber; or trashing damaged goods if necessary. In fact, some retailers provide a full refund and tell customers to keep items that are too cumbersome and costly to return, like furniture. A recent Internet Retailer / Bizrate survey found 46 percent of shoppers prefer to handle returns at a store while 27 percent prefer return shipping. Retailers that have been among the most successful in leveraging their store network for online purchases realize the advantages of customers driving their returns to physical stores. Inventory eligible for resale at full value can be re-stocked immediately without further transportation, and historical trends confirm high incidence of additional impulse purchases when consumers opt for an in-store return. Reverse logistics facility requirements are determined by the type of goods being processed. For smaller inventory items, 40’ clear heights and wide bay spacing may not be necessary. A significant dock door count ensures flexible material handling flows inbound and outbound along with generally standard trailer parking. On the other hand, some 3PLs may start tenancy with more manual returns processing and later choose to repurpose the leasehold for more automated fulfillment processing. Against this possibility, some reverse logistics users may seek more of a modern fulfillment type shell with 40’ clear, significant power and extensive associate and trailer parking. Most supply chains are built around the need to push goods in one direction. Never has there been such a mandate for equally robust and efficient reverse logistics processes and warehouse space in which to execute them. Just imagine the journey that too-small pair of sneakers takes after you print that return label and drop it in the mail. You can be sure that every time those shoes are touched through the process on the way to the next customer, the retailer’s margin gets slightly smaller. For more information on eCommerce and the changing retail landscape, please visit www.cushwakenewcommerce.com.

using a 3PL might be a preferred solution for many retailers.

customers compared to what is spent attracting new customers. Return policies and processing are vital parts of the investment needed for customer retention because of the value-add for customers. Faced with the daunting, yet customer-critical task of managing returns, retailers have two basic options: self- perform or outsource. The most appropriate option depends on many factors. Smaller, digitally-native brands often outsource fulfillment to third-party logistics providers (3PLs) as they scale. Doing the same for reverse logistics is often the best solution for those sellers. As the outsourced reverse logistics industry continues to expand, we can expect to see continued consolidation of smaller providers being rolled up into fewer, larger, often global providers. The leading delivery and fulfillment providers are scaling their reverse logistics offerings to gain economies of scale. Many retailers find it uneconomical to invest in and maintain infrastructure required to handle peak returns for the entire year, which is another reason

In contrast, omni-channel retailer giants handle much of their online reverse logistics themselves, most commonly in dedicated warehouse processing facilities if not in physical stores. At scale, some retailers will self-perform reverse logistics for some inventory types while outsourcing other return types requiring specialized skills or equipment. A good example of this is handling returns of electronics, where returned devices must be assessed for damages and shelf life, then potentially placed in open box inventory to be resold. Many retailers of varying sizes and types elect to self-perform processing in a dedicated portion of a fulfillment or distribution center. Designating certain dock doors and separate process flows within a larger center can be a compromise solution. The demand on returns Whether self-performed or outsourced, reverse logistics processing generally requires significantly manual procedures. Unpackaging, inspecting, logging, making disposition decisions and forwarding for further handling commonly require higher labor costs and more job training. The goal is to process returns as quickly and economically as possible, whether that means

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