Commerce Trends

by Manhattan Associates

Many Happy Returns: How to make stock reallocation a positive, profitable experience

Returns. Even just the word is enough to send a chill running down some retailers’ spines.

Whereas once the concept of returning goods simply meant a customer bringing back items to their local store, today the journey involves multiple options: purchasing online and returning to a store; collecting in store and return online; buying in store and return to a different store; ordering online where the item is shipped from a store but returned to a distribution centre – to name just a few options!

As more and more consumers treat online shopping like a virtual store, the issue of return management grows. IMRG estimates that 25-50% of online purchases are returned, and that’s not counting the cost and logistics of store returns.

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While retailers are acutely aware of the need to reprocess returned items to minimise waste, many aren’t sure how best to route and reallocate products, in order to optimise profitability.

Returns today are a complex process of sorting, testing/inspecting, repackaging, re-labelling, redistributing and reselling, with stock coming into the system from multiple channels – and potentially international territories.

The challenge for retailers is to inspect and reintroduce returned stock back into the supply chain from all these channels, to be resold as quickly as possible. This depends on integrating operational systems across their business, to gain a 360 degree view of inventory – so the retailer can see in real-time exactly what goods, in which locations, are available for commerce.

However, gaining a single, holistic view is only half the battle won. If retailers want to utilise these returns within the larger inventory picture, complete visibility must be part of sophisticated order management software.

With the right technology in place, when a new order is placed, retailers can automatically calculate whether the recently returned item is in the optimum fulfilment location, or whether it’s more profitable to fulfil the order from a different channel.

Find out more by reading our roadmap to profitable omni-channel fulfilment.

Ultimately, returns are just one element complicating the inventory balancing act that multi-channel retail has created. By intelligently managing orders, retailers can limit the cost of reintroducing returns back into the supply chain, and maximise the chance of the items being resold at full price, from a cost-effective fulfilment location.