With companies of all sizes increasingly working on improving reverse logistics and customer satisfaction, it's no wonder you'll notice fewer signs that say "all sales are final." At one time, such signs helped retailers avoid customer returns, but now there's a new paradigm that favors allowing returns as a competitive step to win customer loyalty. Here are ways that modern thinking behind reverse logistics - the process of returning merchandise - is impacting the retail industry.
Why Customer Expectations Matter
The connection between reverse logistics and customer satisfaction has become important to consumers who research products online. Consumers increasingly expect online or traditional retailers to be flexible enough to post a return policy on their website. If web surfers can't easily find the page, they usually start searching other websites. One of the key pain points for consumers ordering products online is they can't test the product before purchasing it.
Retailers must remember that order fulfillment is a process that continues after the customer takes possession of the product. Since the goal of retailers is for the customer to be satisfied with the product, the store needs to at least give the customer their money back or exchange the product for one that functions properly. In the old paradigm, companies that offered a return policy stood out as fair and reputable. These days, a retailer is more likely to stand out in a negative way if it doesn't offer a hassle-free return policy.
How Reverse Logistics Affect Customer Experiences
A high percentage (95%) of consumers who experience a positive return process will likely provide repeat business for the retailer, according to marketing research firm Multichannel Merchant. That statistic alone should be enough to encourage retailers to modernize their technology so that it works well for reverse logistics strategies. Studies further show that bad customer experiences without return policies lead to long-term negative impressions of the company, as the consumer is three times more likely to never return again.
Reverse Logistics Enhancement Strategies
- Learn why customers return merchandise - Tracking original purchase data is essential to resolving customer complaints. The retailer should investigate the problem enough to document why the consumer is unhappy with the product to help reduce such problems in the future. Retailers must also avoid putting the returned item back on the market without testing it first.
- Use transparent monitoring systems - While it's common for businesses to monitor products across the sales process, many old-fashioned retailers lose track of what happens to customers after they return merchandise. A retailer can improve the chances of customer satisfaction on returns by making the reverse logistics process visible across the entire supply chain. Close monitoring of return data helps a retailer hang on to customers who are ready to ditch the brand.
- Establish clear return policies - Avoid hiding your return policy in fine print. Make it easy to find for followers exploring your company site. Don't flood it with legal jargon. Instead, make it as clear as possible with a sense of caring for customer expectations. Clear and responsive communication helps reduce negative effects.
- Move toward modern technology - You can gain an edge in customer satisfaction by investing in the proper technology that facilitates reverse logistics strategies. It should include user-friendly tools to reconcile returns and inventory that integrates with e-commerce software. Using a warehouse management system (WMS) and adaptable inventory management helps separate good products from flawed merchandise.
More than ever, retailers are feeling the pressure between facilitating reverse logistics and customer satisfaction. It's now a business survival strategy rather than an option for companies that take online orders. The key to winning a loyal retail following is paying attention to customer expectations and finding solutions to pain points. Optimizing the supply chain for reverse logistics is now essential to maintain loyal customers.