SHORT TAKES: Round Trip

An ominous crunch awakens you from peaceful repose in the stateroom of your retail luxury liner. Startled, you leap to the porthole and peer out to see a white shape looming in the moonlight. At first you think, “It’s not very big, so it can’t be that important.” But then you see the sign. “RETURNS,” it says, and you realize with horror that it’s only the tip of the iceberg.

Just when you thought you had netted your unruly customers and gotten their returns habits under control, this new danger looms. Online returns will reach a volume of $5.8 billion by 2005, according to Jupiter Media Metrix, and reverse logistics is going to keep getting bigger. Automated returns request procedures, outsourced handling of package pickup and shipment, speeding up the issuance of credits to consumers — none of these measures will stem the tide unless you take appropriate evasive action now.

Data trawling

To develop effective reverse logistics processes, online sales channels must collect and analyze as much data about returns as possible. Jupiter classifies primary reasons for returns in three categories: process, product, and consumer behavior. Process includes pick/pack/ship (damaged products, incomplete orders, late orders, wrong orders) and customer service (no problem resolution, no response, unresolved invoice/billing discrepancy). Product returns are usually related to quality (bad fit or malfunction, item failure, performance/quality not acceptable, unclear instructions). Consumer behavior that results in returns stems from customers simply changing their minds or the product not being as expected.

The Jupiter research stresses that this sort of data procurement allows for smoother navigation of the sea of reverse logistics. Companies can dispose of returned products earlier, process returns faster, track inbound goods more closely, and plan related labor needs more easily. Reducing the mass of the reverse logistics iceberg through analyzing data allows the flood of returns to recede. For further information, see www.jmm.com

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