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5 Reasons why Reverse Logistics is important for your Business
Author: Vikrant, Head of Operations
While return is always associated with customer dissatisfaction, an effective process can convert it into an opportunity to build better customer loyalty. The longer a reverse logistics pickup takes, the more agony is added to the customer. On the other hand, a quick return attempt increases the level of trust in the customer and pushes them further to stick to the platform. Many companies have now moved to a no-questions-asked policy for returns just to boost the customer’s confidence. Many companies have started seeing the return percentage as an increasing trend in their relationship with customers.
While improving every step of the supply chain, an effective reverse logistics solution can significantly impact the asset recovery of a business and, as a result, positively contribute at an operational level as well. From the time a customer raises a return request to the time the product has been returned to the seller/company, it stays as dead inventory in the chain, causing wastage in cost and inventory. So, apart from customer satisfaction, a quick return also adds the opportunity for the return product to be resold or treated as per the status.
Reverse shipments allow a company to closely monitor the quality of the product, and a high return rate acts as an alert to relook into the quality. Returns due to size issues have acted as a catalyst for improvements with features like size charts, size guides, and virtual trials. Such continuous improvements in the UI help in attracting better traffic to the platform. Additionally, companies can identify quality sourcing partners through simple data analytics to reduce returns.
Improved ROI and sustainability
A cost-effective reverse logistics system can not only help the company reduce its return cost, but the speed of returns can further help in customer retention and improved revenue. Reverse logistics is sometimes considered a dead cost and is not prioritized by e-commerce companies. However, one must remember that while half of the customer experience is drawn by the web interface and products, the other 50% of the consumer life cycle consists of fulfillment and logistics.
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