Why reverse logistics is key to Black Friday

It's getting earlier and earlier when you start hearing offers weeks and even months in advance of Black Friday, a key date for Christmas pre-shopping. And that's because more and more large retail companies are deciding to extend these dates of consumption, launching offers before Black Friday and after Cyber Monday.

This translates into a supply chain that is less pressured by the bottleneck generated by a peak demand originally focused on a single day. However, there is a key element in peak demand strategies: reverse logistics due to the nature of the purchases and their expected high volume of sales, of which another large number of returns are expected after the holidays.

If you want to know the important points of reverse logistics on Black Friday and other demand peaks, take a look!

Packaging damage

According to this DS Smithstudy, it was estimated in 2021 that e-commerce shoppers would receive more than 14 million damaged and spoiled products and 64% of online shoppers had already claimed to receive their purchase in poor condition before. This results in a high volume of merchandise returns, especially if the price is more than 25 euros, and high consumer dissatisfaction.

This problem can be avoided without much mystery by applying the right packaging for each product or order. Either choosing the right package size without being unnecessarily bulky, applying suitable protectors for them and closing the box properly avoiding spaces that can be opened. Besides it is necessary to avoid overpacking because, sometimes, it turns out to be more counterproductive for the protection of the article and generate more waste of materials.

It should be noted that staff must follow instructions on how to handle packages, as quick but careless handling could cause knocks and damage the item. In addition, not all products are eligible for return because, if the shipping costs turn out to be higher than the price, it is decided not to take the package back to the warehouse and, instead, alternatives and compensation are offered to the affected customer.

Package delivery failures

In some U.S. states such as California, Black Friday has been declared a holiday, while in most countries it is a working day. However, in the event that the offers are extended days or weeks before, customers are more often absent from their homes, which means many failed deliveries that must return to the warehouse and one of the great challenges of reverse logistics on Black Friday.

Among the most popular options to deal with this more common inconvenience is the click & collect, giving the consumer the option to pick up his order when he can. Another alternative is to deliver purchases in lockers and delivery points such as post offices, especially in the case of e-commerce without physical stores or marketplaces. Whichever of these options, they directly avoid the return of the package by the delivery person and, therefore, more attempts of reshipment that entails more transportation costs.

Free returns and Bracketing

El bracketing is a trend that has emerged in recent years in which customers buy online the same product in multiple colors or sizes and then keep one and return the rest. Although this behavior emerged from retail giants offering free returns and convenience to the consumer, the reality is that it is a headache because of the high costs involved in returning the product suitable for sale, from transportation to reintegration into stock.

And times such as Black Friday are not exempt from this behavior because, according to UNO Logística, return rates are 24.5% and increase between 5% and 10% in times of high sales volume.

To this end, solutions are already being implemented to mitigate the financial and environmental impact of a high volume of returns. The simplest and most popular option among large retail companies is to offer free returns in the physical store, although others are opting to drop free returns and start charging for them according to their own policies. Even artificial intelligence can help to study the cases and decide whether or not to return the product based on its profitability. 

However, there are other measures that prove to be more drastic on the part of the consumer, for example, not allowing returns as in the case of small e-commerce that cannot afford to have the item returned. Even some industry giants such as Asos and Amazon have implemented blacklists of consumers prone to bracketing to disallow free returns.

Conclusion

Reverse logistics in itself is already a major challenge in terms of managing costs, resources and even environmental impact. At a time when offers and other conversion strategies are increasing a (dwindling) number of impulse purchases, so too will returns and therefore reverse logistics management. Consequently, a TMS will enable efficient and visible transport management, even in the most tricky moments such as rejects and returns.

At Hedyla we understand the importance of providing optimal customer service, as well as reducing costs, which is why our solutions come with built-in communication and incident reporting tools for any situation that may arise, whether it is a failed shipment or a return.