Having an easy, convenient and simple returns process is a critical part of providing a positive customer experience today. Yet while beneficial to consumers, returns are one of the biggest supply chain management challenges for the modern brand or retailer. As noted by DC Velocity, “The sophisticated automated systems they've designed for processing high volumes of outgoing orders typically don't run as well when shifted into reverse.”
Returns can also take a financial toll on a business. There’s the cost of shipping products back upstream in the supply chain, which some companies choose to pass onto the consumer while others don’t in fear it can deter purchases. When products enter secondary markets, that can eat into profits as well.
All these problems are only magnified during the holiday season, when purchase volume—along with return volume—spikes.
In just 2019, the retail industry saw a record-breaking number of holiday purchases. According to Mastercard’s SpendingPulse™ report, consumer spending surpassed 2018 by an increase of 3.4 percent, including a nearly 19 percent jump in online sales.
Over the season though, UPS estimates that it facilitated over 1 million returns each day from December through early January. Holiday returns reached their peak, climbing to nearly 2 million on Jan. 2, or “National Returns Day.”
These returns amounted to $41.6 billion worth of products, according to forecasts. That’s a lot of money to leave to risk on account of inefficient or improper reverse logistics.
How can brands and retailers better manage the return process? It starts with having transparency across the supply chain. A distributed ledger, or “blockchain,” offers this through a decentralized, digital record of all product movements and transactions, including back upstream into the supply chain.
With data visible to all connected parties, a distributed ledger provides brands and retailers with real-time information on what consumers are returning. Tying together multiple disparate systems, it eliminates silos and uncertainties around item status, authenticity, eligibility, and quality.
Companies thereby benefit from accurate, timely information on returned products, enabling them to:
Ultimately, better reverse logistics management—powered by blockchain—means you can keep consumers happy while protecting your business from losses.
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