R2 Logistics

What is Reverse Logistics? Why Is It on the Rise?

Why Reverse Logistics?

It’s no secret that retail has shifted more and more to the digital realm in the last decade. Online shopping continues to flourish, with retailers large and small popping up all over. But while customers have traditionally been able to return items to a brick-and-mortar store, the world of eCommerce presents some unique challenges when it comes to a retailer’s return policy.

According to Business Insider, return rates for eCommerce are between 25% and 30%, compared to less than 10% for in-store purchases. Online retailers already rely on a logistics process to get an item into a customer’s hands. In this post, we’ll discuss the process of reverse logistics, which aims to get the product returned to the shipper.

What Is Reverse Logistics?

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Standard logistics moves a product from a seller to a customer. Reverse logistics is how you return the product from the customer back to the seller or manufacturer. 

The process can also be associated with the reuse of products and materials. Typically, businesses must use reverse logistics when a customer returns a product to a retailer. However, it can also be applied to collect a product for repair or refurbishing.

Maintaining an efficient reverse logistics strategy can help improve customer satisfaction, which can boost customer retention rates.


How Do Businesses Use Reverse Logistics?

Businesses use reverse logistics to be more accessible to customers as well as improve their products. Returned or defective products can be refurbished and resold or disposed of if repair isn’t possible or practical.

 This example may be particularly relevant in product recall cases, where reverse logistics methods can ensure the safe return of a defective product back to the seller or manufacturer.


What Do Customers Expect from the Process?

Customers expect clarity and simplicity from the process. According to Business Insider, nearly two-thirds of shoppers said they would cease to use a retailer if they had any issues with the returns process. Businesses should never cut corners with their reverse logistics process.

A company should make their return policy very easy to locate on their website, customer receipts, and invoices. If your business is doing retail online, reverse logistics should primarily ensure that the process is streamlined, with clear direction for printing return labels, etc. 

That being the case, eCommerce merchants and manufacturers should partner with a 3PL or shipping company that the customer can access locally to ensure a simple return.


Current Factors that Impact Reverse Logistics

One of the most critical factors impacting reverse logistics strategies is the increased volume of customer returns. Because so much of retail occurs digitally, retail relies heavily on efficient, reliable shipping methods. 

It’s easy to see why traditional logistics would be a priority, as it aims to get a product in a user’s hands. But reverse logistics is increasingly important when shippers rely on a service to return their merchandise.

This increased volume means you need a reliable transportation company or third-party logistics (3PL) company to handle the volume your business generates. A 3PL can supply logistics solutions for sales and returns in many cases and offer you greater efficiency overall.


How to Improve Your Reverse Logistics Process

The easiest way to improve your process is to partner with the right logistics company. The right company can ensure that your reverse logistics process is fast and efficient and offer tracking options so that you can offer your customers a transparent view of the entire process.


Contact R2 Logistics

What can R2 Logistics do for your business? We’re an award-winning 3PL provider that offers customers the chance to rate shipments and receive real-time visibility of their entire logistics network.

 For additional questions or to talk to an expert, contact the friendly team at R2 Logistics today.

 

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