Online fulfilment: The challenge of returns
Date: November 18, 2015
Category: Industry news
At our recent AGM and briefing session – Unlocking the power of standards – Andy Robson, Solution Manager, explained how the growing problem of returns from online shopping is being addressed with GS1 standards.
The rapid growth of ecommerce has brought returns into the spotlight. The ease of returning a product is critical for customer loyalty – 78% of customers cite it as a reason for shopping with a particular retailer.
As distance selling has become far more common place, for apparel retailers in particular getting returns right is an imperative if they are to retain their customers. Current industry estimates suggest returns from Black Friday sales could cost retailers up to £180m alone.
The problem of returns
The returns process used to be simple – the customer would usually return an item to the shop they bought it from. But the introduction of omnichannel retailing has led to customers creating their own personal supply chains, making use of multiple fulfilment options to suit their needs – in store, click and collect, delivery to home, delivery to a collection point and more.
Because of this the returns process is now equally complicated. Retailers and logistics providers use a variety of solutions and processes. And while these solutions work – just about – they become increasingly stretched as more logistics providers are involved. Even with these proprietary systems in place, retailers still have no real visibility of the reverse logistics process.
It’s not just a headache for the industry – but also the customer. And everyone recognises there is substantial room for improvement.
Working together to solve the problem
At a recent workshop hosted by GS1 UK, leading UK retailers found that starting from first principles, a single tracking code or standard identifier would help the returns process. It would simplify the tracking environment which currently requires multiple look-up databases to translate between the different systems used by individual logistics providers.
A better way of working
The retailers found that to improve returns a number of criteria need to be satisfied.
- The tracking process must be universal and ‘agnostic’ to the returns channel route used by the customer
- The solution must be applicable and fit for purpose in a cross-border environment –- as up to 20% of goods purchased online travel overseas
GS1 standards provide a solution: the Serial Shipping Container Code (SSCC). The SSCC identifies a logistic unit, which can be any combination of products packaged together in a single delivery unit. They’re used to track shipments as they travel through their supply chain. Already widely used in the retail industry, the SSCC fits the criteria of providing a universal solution, that’s agnostic to channel and works cross-border.
To enable the use of SSCCs for returns there’s a need for a more formal process for customers to declare what they’re returning. Through this process an SSCC can be generated and assigned to a returns parcel. This will give complete and accurate visibility to both the customer and the retailer of where their returns parcel is, what’s in it and how far through the process it is.
We’re working with retailers and multiple logistics companies to solve the returns problem with the SSCC – and we’ll be announcing more news soon.
Read more about GS1 standards and fulfilment