Tuesday, May 21, 2024
Supply chains should brace for increase in eCommerce

Supply chains should brace for increase in eCommerce

Nick Ghia, general manager of North West Europe at C.H. Robinson has warned of chaos along supply if they don’t get their act together when it comes to managing returns during this Christmas and into the new year.

Supply chains will face unprecedented pressures throughout December and January as an expected surge in online shopping leads to more consumers returning goods. His warning comes as a recent report reveals that more than three quarters (77%) of British consumers now do at least part of their shopping online, up 16% on 2019, with UK online spending expected to exceed £74bn by the end of 2020.

“There’s a real risk that supply chains will be caught out and be overwhelmed by a massive increase in returns due to what will be a record breaking year for online sales as people stay away from shopping centres and social distancing restrictions remain in place,” Ghia warns.

Many retailers offer extended returns policies for items bought before Christmas and industry analysts predict that up to 40 per cent of online purchases are returned. The rush of returns typically start at the end of November following Black Friday and Cyber Monday and 2nd January is known as National Returns Day, with some 72% more returns than on a typical day in December. Also, more than three quarters (78%) of consumers look at the returns process before choosing where to shop.

 “Companies need to ensure they have a robust return management strategy in place so they can provide the best possible customer experience and maximise value recovery from the returned items,” Ghia points out. “There are a number of critical considerations and collecting data is key across the board so artificial intelligence, together with predictive analytics technologies, will have a significant role to play this year to make sense of all the information on millions of expected returns.

“Firstly, data needs to be collected on item condition and reason for return to determine whether an item coming back to the warehouse is suitable for resale or instead needs to be scrapped or repaired.

“Secondly, it’s crucial to gather data early in the return process as returned items can be unpredictable and follow no obvious pattern. It’s therefore critical that close tabs are kept on the items as they enter transit. Upon delivery back to the warehouse, the importance of visibility of the returned items is equally important so that the goods can be verified thereby preventing unnecessary inventory loss.

“Finally, controlling the items that are sent back to the warehouse in the first instance is key. Having every return go back to the warehouse can tie up vital operations. By controlling returned items, companies can dispose of or donate items that are not saleable in store.


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