Importance of Leveraging New-Age Technologies in Reverse Logistics

Reverse Logistics is not a new phenomenon – it has been an integral part of retailing for over a hundred years now. However, it was only in recent years that Reverse Logistics came more into prominence with the e-commerce boom and it has emerged as a key component of any successful, streamlined supply chain. In present times, consumers expect no-fuss return policies, which perhaps explain why returns on e-commerce orders are three to four times more than brick-and-mortar purchases.

Evolving customer expectations meant that no-fuss return policies were the sole objective of consumers, who would not settle for anything other than a hassle-free return policy. According to a study conducted by the Reverse Logistics Association, e-commerce order returns are three to four times more than brick-and-mortar purchases. These findings clearly indicate that there is heightened Reverse Logistics activity within the e-commerce space.

 

Reverse Logistics is assuming increasing importance across supply chain management. Organizations that operate in industries, where returns constitute a larger portion of operational cost, put in place better reverse logistics systems and processes. For example, returns are a major determinant of profitability in the book industry. Further, the speedy handling and disposition of returns hold the key, especially in computer and grocery industries where life cycles are very short.

Of course, the challenges for retailers and vendors lie in efficiently processing returns that pave the way for prompt and cost-effective merchandise collection and return. Further, customers being fussy about service accuracy and timeliness only make the job of retailers and vendor that much tougher.

 

Organizations can transform reverse logistics by leveraging different software, platforms, and tools. Digital technologies enable organizations to drive a cost-effective reverse logistics process and at the same time, ensure the customer experience is not compromised besides ensuring better life cycle visibility and predictability.

 

Various digital technologies such as Data Engineering, Advanced Analytics & Artificial Intelligence, IoT & RFID, Blockchain, Augmented & Virtual Reality, and Cloud carry immense potential to transform the reverse logistics industry. Take the case of Blockchain technology that can transform the reverse logistics process by facilitating a secure and transparent record of shipment and closely operates with several stakeholders across geographies. One must make the mention of Augmented and Virtual Reality technologies that can also improve the reverse logistics process by unlocking business value through remote support and virtual try before buy, thus enhancing CX and reducing returns.

 

Organizations are fast realizing the importance of leveraging new-age technologies to drive enhanced efficiency in the Reverse Logistics process with the objective of attaining the 4 Cs – Cost Avoidance, Cost Reduction, Cost Elimination, and Improved Customer Experience.