The e-fulfilment trend of online buying keeps on going
The year has not passed yet, but analysts already predict that the turnover record will be broken again in 2019. And this is all thanks to our online buying urge. Think for example about the huge turnover Alibaba received on Singles Day. As a logistics service provider, are you already profiting from this e-fulfilment trend? With all online purchases – global e-retail sales amounted to 2.8 trillion US dollars in 2018 -, e-commerce has become an important source of income for logistics service providers. Because the item that gets purchased is usually stored at logistics service providers, who make sure that the package gets delivered on time and in perfect condition within no time. But this growth also brings along a few challenges. For web shops and logistics service providers: customer expectations, the need for sustainability and a flow of returning goods.
Because when we say online shopping, we say returns. Here in the Netherlands, we are leading when it comes to returning goods. Package delivery service DPD beats all in Europe with a return number of 9 percent. Besides, the German retailer Zalando hits a return percentage of a stunning 50 percent. This means half (!) of the clothes they deliver gets sent back. Those are quite some miles for a new pair of pants or shoes.
Try before you buy: returns are part of the current e-fulfilment trend
A report of the American software company Brightpearl shows that in March 2018, retailers had to deal with a ‘tsunami of returns’. Mainly due to the concept ‘try before you buy’. But most web stores cannot withstand the (financial) consequences of the high return rates. By average, a returned product is dealt with by seven individuals before it is offered for reselling. Not to mention the percentage that is not even fit anymore for reselling. Think about a package that is opened a bit too enthusiastic or a shirt that was not good party material in hindsight. In short: returning costs time, effort of delivery personnel and it leads to articles ending up in the bin more than once.
Retailers are looking for fitting solutions for their high number of returns
There are examples of retailers that are considering to create a blacklist of notorious returners. Think about ASOS and Harrods. Others are looking for an alternative route and are testing the possibilities of automation and robotization. For example, Zalando is experimenting with 3D technology and artificial intelligence to push back the number of returns with at least 4 percent.
Where lie the possibilities for logistics service providers in this e-fulfilment trend?
All of this does not only influence the web shops, logistics providers too need to act against a sharp price. What can you, as a logistics service provider, do against drowning in (labor) costs? Namely, it is a misconception that reverse logistics is an expensive and unprofitable process. Because within this process, you can save considerably on handling by smart automation. And what do you think of the options regarding predicting analyses and data exchange?
The process starts at the moment that the product gets announced for return. You exactly know which goods you can expect and at what time.
Scan for a transparent process
Scan the article at arrival, immediately start the quality check process and share your feedback real-time with internal and external partners by using RF scanners. While the article is heading towards the return area for further handling, your team already knows what you expect from them. Moreover, you can follow individual articles during the entire process thanks to one simple scan action.
Do not skip a step and inform involved parties with automated messages
Make sure that everyone on the work floor knows what needs to happen with every individual product. Simply by automatically sending a message to the next one in the cue with the required information.
Be willing to use the available data and adjust your resources and available space to that data. Are there more articles that you can directly plan in the order process than that you need to repair? Then you exactly know where you should plan your people and where goods need to be stored.
Expand your portfolio with e-fulfilment: it is possible with 3PL Dynamics
In the Netherlands, over 50% of logistics service providers also do e-fulfilment activities. And if we filter these to purely 3PL companies, this number is even 63%. As a software provider specifically for this target group, we make sure that 3PL Dynamics moves along with this e-fulfilment trend. Because you know: our product is developed for and by the branch. Are you curious how we can support your e-fulfilment activities? Please contact us.