For retailers, the challenges of the festive season don’t end with Christmas. In this article, John Burgess from supply chain software specialists Balloon One shares his insight into how e-commerce warehouses can prepare for the January returns period.
Over £5.6 billion is expected to be spent across Black Friday and Cyber Monday in the UK (finder.com), promotions that signal the start of the festive period for most retail businesses. Over 225 million e-commerce parcels will be despatched to customers during these events — each a potential return in the making. Because it’s not just sales that increase at this time of year, but return rates, too.
Convenience means that many Brits will do the bulk of their Christmas shopping online, which has an average return rate of 30% compared to just 8.8% when shopping on the high street (invespcro.com). As a result, online returns in the UK will hit £5.6 billion by 2023, a 27.3% increase over the next 5 years (fashionunited.uk). Plus, in January people are more likely to return unsuitable Christmas gifts. To make sure you’re prepared, below I’ll be taking you though how you can make sure your business is ready to receive these returns.
You may have decided to hire temporary staff to help fulfil the surge of orders you received over the festive period. These seasonal workers may have assisted with picking and packing operations to make sure all orders are done in a timely manner and shipped out to the customer quickly, but you may also want to consider cross training your temporary staff so they can also help manage the amount of returns you expect to receive after Christmas.
Having more hands on deck means faster processing times and increased productivity, which is important if you want customers to receive their refunds quickly, and will help to get the returned goods back onto the shelves in time for the January sales. It can reduce the number of complaints received and give your business a great reputation in the process.
When an item is returned, it can be deemed fit for resale, in need of repair/refurbishment, sellable as defective at a reduced price, or disposed of or sold as scrap. Customers can flag an item as faulty when they return it, which can help sort most orders, but every item still needs to be assessed thoroughly to determine its standard. Then, you can send as many as possible to your internal or external repairs team.
Items need to be checked and inputted into your electronic system via tagging and tracking so that the refunding process can begin for the customer. This is usually made faster by implementing devices that scan barcodes (either handheld or robots) so that system can update automatically. Having a real-time digital record of your stock is also vital for letting you know how much returned stock you have, and analysing it using the right software can help you make better decisions about which to make a priority when triaging.
Triaging returned items
Some returned items that are fit for resale are more at risk of obsolescence than others, such as seasonal products or those with a use-by date. Products that are highly in-demand also need to be prioritised, because they’re almost guaranteed to sell quickly. This is why triaging your returned orders carefully is important. You can avoid deadstock and missed opportunities by organising your returned goods in an efficient way, and the right software can help you do that.
Technology can be used to automate several processes and even identify areas for improvement, especially regarding triaging returned items, based on data received from a number of sources along the supply chain.
Another important aspect of handling your returns is where you’re going to store your inbound items. The influx of returned orders may take up more space than you may think, particularly if you usually have quite a low rate of returns.
You need to set up a designated area of your warehouse for storing returned goods that can cope with the sheer number of products you’ll have coming in, without wasting too much space that your regular stock could use. A good warehouse management system (WMS) can predict trends and anticipate demand by using forecasting and planning software, so you can better work out how much space you will need.
The tips in this guide can help prepare your business for the aftermath of the festive period. Embracing the latest technology is vital if you want to improve efficiency, especially in January when you can expect more returns than usual.