A report studied the “importance of having cohesive and efficient” processes in retail, including for cartridges.
The report by industrial real estate firm CBRE, and hosted by Logistics Management, aimed to examine the “intersection of holiday e-commerce and reverse logistics activity”, with processes to “be looked to more than ever for retail shippers” as the “total value of returned goods purchased online” this year is set to reach between $14 billion (€13.4 billion) and $29 billion (€27.7 billion), compared to total period sales of $95 billion (€90.9 billion).
Holiday Stress: E-commerce and the rapidly rising rate of return found that the “importance of having cohesive and efficient reverse logistics processes for retailers is far from overlooked”, especially “at this time of year” because sales are “moving along at a very brisk clip”. The article added that reverse logistics, “coupled with increasing e-commerce activity”, continues to “gain traction”, with e-commerce return rates at 12 to 30 percent compared to retail at eight percent.
This does depend on product type, but the report noted that returns “either sold at discount or disposed of” end up costing retailer 4.4 percent “of total revenue per year”. Joe Dunlap, Managing Director of Supply Chain Services for CBRE, noted that “how things end up shaking out for holiday season reverse logistics is difficult to predict”, adding that “it is infinitely harder knowing what’s coming back, when it’s coming back, how it’s coming back, where it’s coming back, and what condition it will be in when it arrives.
“Those kind of attributes are tremendously important to be able to handle things efficiently in terms of costs and speed”. He also stated that “to quickly position items or, for example, route a return back to a retail store to potentially sell it more quickly is one of the most important things retail shippers have to deal with for reverse logistics, especially for e-commerce sales”.
With the “fair amount of seasonality related to holiday sales e-commerce volume”, in terms of “how many companies build their supply chain businesses” based on the other “11.5 onths of the year”, so-called “flexible resources” that third parties provide “to supplement their needs during this short period […] has tremendous value”. Dunlap pointed out that this is “ not something they want to build a building for two or four weeks of the year, when they are making investments for 11.5 months of the year. This is where 3PLs tend to provide their flexibility in some cases”.
Printer cartridges are one specific area, along with printers where “there are year-round reverse logistics”, and feature “speciality or warranty service items” for sending back, repairing and sale as a refurbished item – or remanufactured, in the case of cartridges. These are “a different animal with some consistency to plan for”, as opposed to “that flex spike for two to four weeks of the year”.
On the future of reverse logistics, he stated that “retailers have become much more data-intensive in terms of understanding what consumers wants, needs, demands, and personal preferences are. They are tracking us in a way which is oblivious to us but meaningful to them so they can better position the right product at the right place at the right time in the right colour, among others, and […] are getting better at minimising, or reducing, reverse logistics as a percentage of sales”.
He concluded that “the idea that we are getting smarter as retailers as data scientists project better, position better to order and make the right product […] to make the supply chain more efficient is spot on to reduce reverse logistics volume”.