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5 Reasons why Reverse Logistics is important for your Business

In this pandemic-stricken world today, e-commerce business has grown leaps and bounds as compared to the traditional retail businesses.

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5 Reasons why Reverse Logistics is important for your Business

Author: Vikrant, Head of Operations

Importance of Reverse Logistic
In this pandemic-stricken world today, e-commerce business has grown leaps and bounds as compared to the traditional retail businesses. Last-mile deliveries have become an important norm due to changing consumer habits from shopping in a store to conveniently getting orders with the tap of a button. According to Brian & Company, the e-commerce sector in the MENA region is expected to reach US$ 28.5 billion by 2022, which is a major shift from its US$ 8.3 billion valuation in 2017. This upsurge in the industry has led businesses to update their processes and look for convenient solutions in their logistics processes.
However, e-commerce business is maturing with every passing day and is coping to retain customers with increased customer satisfaction and process optimization. While it is quick and convenient to order online, customers are facing issues over sizes, quality, damages, and the look and feel of actual products in online shopping. These factors have contributed to the return of shipments, posing a major challenge for all e-commerce companies. With every return, there is customer dissatisfaction, delays in receiving the actual order, held-up payments, and a few more negatives to count upon contributing to why reverse logistics is important. While companies are consistently working on improving the quality and user-friendly interface to reduce the return share, the primary importance remains in the quickest possible return process.
The return process is a sheer wastage in terms of cost for the company in the value chain and thus needs to be looked at very carefully. Companies have realized that an efficient reverse logistics strategy within the supply chain encourages profit-generating opportunities for companies. Here are a few more reasons why reverse logistics is important to businesses.
Improved Customer Loyalty and Retention
Improved Customer Loyalty and Retention

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.
Improved Inventory Optimization with Reverse Logistics

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.
Improved Transparency in value Chain

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.

Operational Optimization With returns and replacements becoming an unavoidable menace in the e-commerce business, it is important to look at a cost-effective and optimized reverse logistics solution. There are several 3PL logistics companies that have developed significant expertise in reverse logistics, especially in the MENA region. Companies like Jeebly-Last Mile Delivery & Logistic Company UAE provide quick single-day return facilities also renowned for reverse logistics solution. In our next blog, we will also understand how some of these companies have developed an effective network clubbed with their first-mile fleet to offer a cost-effective solution to e-commerce companies. Along with this, there are many more reasons that go a long way in proving the necessity of a streamlined reverse logistics strategy for a business. Therefore, it is important for e-commerce companies to effectively choose their 3PL partners who have a strong and credible network to perform their to and fro deliveries.

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