The Role of Returns in e-Commerce

The convenience of being able to return a product easily has revolutionised online shopping with customers now able to shop for a multitude of items which previously would only have been possible in stores.

Many large e-commerces have embraced this approach with companies such as Amazon, Zappos and Zalando being amongst the first to popularise easy returns and introduce policies far more generous than was previously possible.

In this video, LokadTV welcomed Paul Bello from Revers.io to discuss this change of mindset.

How returns have become such an important part of the e-commerce industry?

Retailers estimate that around 30% of the items sold online are returned by customers.

We learn why this strategy can be challenging from a logistics perspective and discuss how the burden is gradually shifting from the consumer to logistics providers to redistribute stock back to the main hub. We understand more about the impact that easy returns is having on the environment and how, with customers not being required to drive the last mile to a hypermarket, this approach can be argued to be beneficial.

Finally we discuss the future role that returns will take in our shopping experience and debate whether a day will exist where stores do not exist at all.

Episode Map

0:00:08 - Introduction

0:00:41 - Perhaps you could start by telling us a little more about Revers.io?

0:01:45 - Joannes, today we are going to talk a little bit about the importance of returns in the e-commerce industry. What is your experience here?

0:03:20 - What are the main benefits of an easy returns policy?

0:04:10 - Is this a recent shift? When did these changes start being introduced?

0:05:06 - What kind of supply chain challenges does this ease of returns policy introduce?

0:07:50 - How do you differentiate between what is a return for a defect and what is a return just out of taste?

0:09:50 - Here at Lokad returns I assume a standard part of an optimization, so how do you work with that?

0:12:45 - Is that what you’ve observed from an IT perspective, that there is a real challenge integrating with ERP systems?

0:14:06 - Fundamentally with returns you will be forecasting for their tastes rather than for needs, is this harder to forecast for?

0:16:30 - From an environmental perspective can you see this willingness to promote returns continuing?

0:18:10 - Is it a challenge from a technical perspective to redistribute stock around a network?

0:21:26 - To conclude how do we see the future role that returns take in our shopping experience? Will we ever have to go to a store at all?

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