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Let’s face it. Your Mom’s brother’s second wife, Aunt Betty, doesn't know you as well as she thinks she does. She got you a gift that was, well, not great. We all acknowledge that there are times when we need to return an item that might not have met all the expectations the giver had hoped.
According to Statista, holiday retail sales increased 5.3% between 2021 and 2022 from $889.3 billion to $936.1 billion. Simultaneously, retailers saw an uptick in holiday returns for that same time period. It’s reasonable to think that higher sales volume would translate into higher returns, but is that the only reason for the high level of returns during the 2022 holiday season?
In this article, we'll explore the significance of having a seamless returns plan in place for the holiday season, shedding light on why it's essential for your 3PL operations.
The holiday season, a time of bustling shopping sprees, both in-store and online, brings an inevitable consequence – an uptick in returns. This surge is particularly pronounced when the purchase is intended as a gift. Recognizing the inevitability of returns and closely monitoring return trends are pivotal aspects of keeping your shipping operations finely tuned. Handling returns with finesse should rank high on your priority list, ensuring a seamless process for both your internal teams and your valued customers.
As a 3PL, you face an array of reasons for returns. Your mission is to streamline the return process, making it as straightforward and well-organized as possible. Here are three common scenarios to navigate when dealing with an influx of returns during the holiday season:
1. “Sorry, Mom. It didn’t fit because I’m not 12 anymore.”
Clothing and fashion accessories constitute a significant portion, approximately 20%, of all holiday returns in the United States. Often, the item aligns with the purchaser's preferences but not with the recipient's style. It might be that the gift-giver made an excellent choice, but the size, cut, or length didn't quite match the end user's expectations.
2. “What do you mean, my package couldn't be delivered?”
A staggering 80% of holiday shipping returns are related to items damaged in transit. The holiday season ushers in increased sales, leading to a surge in shipping volume, which can, unfortunately, result in heightened shipment damage. The remaining 20% of shipping returns can be attributed to various factors, such as incorrect addresses that necessitate the carrier to return the package or requests for a "signature required," leading to returns due to the absence of a recipient.
3. “OK, I sent the item back. So, where is my money?”
Retailers and eCommerce companies are increasingly simplifying the return process for unwanted items. While the return trend is on the rise, sales revenue doesn't necessarily suffer. This is mainly due to businesses offering "in-store" credit instead of returning the customer's payment. Additionally, with the proliferation of local drop-off points, customers don't need to repackage and ship items back. Instead, they can conveniently return items to a retail partner for a full refund. These returned items are subsequently sent in bulk to the 3PL for sorting, tagging, and processing, commonly referred to as ‘reverse logistics’.
For 3PLs (as well as retailers and eCommerce entities), handling returns is undeniably complex, demanding meticulous oversight. Establishing a transparent and equitable process for 3PLs to receive, track, and process returns, all while aligning with clients' stringent standards, is paramount for ensuring a seamless holiday shopping experience.
Now that we understand why returns happen, why returns can be difficult, and why handling returns well is so important, let’s look at a few ways that 3PLs can streamline the return process.
As manufacturers ramp up their production speed to meet the demands of the holiday season, 3PLs need to take the time to prepare for the increased workload and strain that this season adds to their teams. Being prepared with the right tools, tactics, and people is crucial to think about, ahead of the busy season. As an industry-leading Warehouse Management System, Infoplus provides an application that can play a critical role in the processing of both everyday warehouse management and specialized processes like product returns. What can a WMS offer to streamline a successful Holiday return season?
Early preparation for the processing of product returns can help make a hectic holiday season a profitable addition to your bottom line. Communicating well with your clients and understanding their seasonal goals and policies will build the trust necessary to maintain an excellent long-term partnership. Here are some key strategies for making the holiday return season a win-win for you and your clients.
In a world where data is king, it is important to look back on events with an eye toward improving the process for the next time. Once the holiday season ends, take the time to review what went well and what could have gone better. Here are some questions to ask when the dust has settled:
Holiday returns, driven by evolving consumer demands and the surge in e-commerce, present multifaceted challenges. The landscape is shaped not only by size and style mismatches but also by damaged goods, incomplete deliveries, and a shift toward store credit over cash refunds.
For both retailers and 3PLs, these challenges loom large. The holiday rush strains supply chains, making the quality of the return process a pivotal factor in customer satisfaction.
Effective communication is the key to mastering holiday returns. By aligning with client policies, providing transparent reporting, and harnessing data-driven insights, 3PLs can help their partners recover valuable inventory and meet end-user expectations.
As the holiday season approaches, it's crucial to assess what works and what doesn't in your returns process. Embracing these strategies, Infoplus offers the guidance needed to achieve a seamless returns process, benefiting your clients, boosting customer satisfaction, and contributing to a thriving bottom line. Invest in Infoplus for a successful holiday season.
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