XPO Logistics: the challenges of online returns

By Georgia Wilson
With the festive season truly over for another year, consumers begin to return their online purchases, XPO Logistics discusses why more retailers are lo...

With the festive season truly over for another year, consumers begin to return their online purchases, XPO Logistics discusses why more retailers are looking to 3PLs.

When it comes to the festive season, XPO Logistics highlights that returns are as much a part of the season as much as the buying process. “In fact, 20% to 30% of the purchases shoppers make online will be returned after the holidays, compared to 8% brought at brick and mortar stores," says XPO Logistics.

What does this mean for retailers?

E-commerce has been consistently seeing high growth over the last few years, with high peaks in the lead up to Christmas. However, with returns going hand in hand with this high spending peak, XPO Logistics sees this volume creating new challenges for retailers.

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The biggest challenge for retailers is the complicated returns process. Specifically, how a return is handled is just as crucial for building brand loyalty as the initial purchase phase, therefore it is crucial for retailers to make this process as quick as possible. In addition to brand loyalty, returns that are completed too slowly can create a situation where the products do not return to the shelves in enough time resulting in price reductions.

What is the cause of a slow returns process?

When packages are returned they tend to come back with excess packaging, in different sizes and have different paperwork to process, and "while an inbound truckload of products from a supplier can take as little as two to eight hours of sorting, it can take up to 48 hours to process a truck full of returns because each item has to be individually checked. All in, processing a return requires 20% more space and twice the labor as sending out a package," says XPO Logistics.

As a result of these challenges, XPO Logistics has seen a spike in retailers turning to third-party logistics providers (3PLs) such as XPO Logistics to handle their returns. 

For more information on all topics for Procurement, Supply Chain & Logistics - please take a look at the latest edition of Supply Chain Digital magazine.

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