Resolution 2020: Fix Returns
Supply Chain Management Review (SCMR) is an industry-leading publication dedicated to the pursuit of sharing academic and practitioner knowledge of supply chain best practices. As part of their January 2020 Issue dedicated to reverse logistics, SCMR interviewed Newmine on the benefits of reducing returns.
According to SCMR, “there’s real margin and customer satisfaction sitting in those piles of returns over in the far corner of the distribution center. Now is the time to create effective processes to gain control of returns. By mid-year you’ll be glad you did…”
“Returns don’t just have to be the cost of doing business,” says Navjit Bhasin, founder and CEO of Newmine. “Better returns management can add to margins,” he continues.
The question is how to do that most effectively. There is no single answer for all.
Bhasin says a basic returns strategy should be quite straightforward—reduce the number of returns in the first place. He
identifies four key benefits from returns reduction:
1) every $1 million return reduction adds $500,000 to the bottom line;
2) improved margins due to fewer markdowns;
3) cost savings in labor, shipping and DC space; and
4) increased brand loyalty as a direct result of a better buying experience.
So the real challenge to executing the strategy is to figure out why returns happened in the first place. For instance, Newmine has identified five top reasons for apparel returns. Without regard for order, they are: wrong item shipped; item displayed inaccurately online; damaged product; quality; and size/fit.
Such information can go a long way to reducing returns because they are all actionable items prior to a sale of any item, says Bhasin.
- Protected: Holiday 2020 Started with Coresight’s 10.10 and Returns Will Follow - October 8, 2020
- Retailers: Here are 3 Tips to being Profitable in 2020 - September 30, 2020
- Newmine Announces Guy Hipwell to Expand Advisory Board - September 23, 2020