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Fast fashion lures us with new collections and apparel of the latest trends, at affordable prices. With this exponential growth in e-commerce comes a multifold rise in the rate of product returns, especially in the fashion industry, contributing the highest return rate of approximately 30%.
Why are product returns maximum in the fashion industry?
Size inconsistencies and mismatch between the product image and the delivered product are some of the most common issues that prompt returns due to ill-fitting. But the chief reason is the bracketing behaviour of consumers aided by Free Return Policies. Buying multiple sizes or colours of an outfit to try on drastically increases logistical costs.
Not to worry, there are some techniques explained below that can be integrated for smart returns management.
Specialised Reverse Logistics Infrastructure
Returns are routed to reverse logistics hubs with automated sorting systems rather than main distribution centres. The products are graded and sorted into 3 categories:
- A-Grade: New/unused — restocked
- B-Grade: Minor issues — outlet resale or repackaged
- C-Grade: Damaged — donation, liquidation, or recycling
This is followed by a system of processing which includes visual checks, tag reattachment, and repacking. 3PLs partner with secondary markets to resell the returned items.
Returns Management Systems (RMS)
Implementing RMS allows 3PLs to automate return authorisation and labelling, track return reasons and status across all channels, and generate data reports on return reasons and item condition.
Apart from these functions, it integrates with WMS (Warehouse Management System) and OMS (Order Management System) to ensure that the returned items are quickly reintegrated into inventory.
Virtual inventory shows real-time availability across multiple fulfilment centres. Smart re-warehousing sends the item to the location with the highest sales potential, not necessarily where it came from.
Data Analytics for Return Reduction
By analysing return data, 3PLs help brands identify patterns to understand why items are returned and improve product descriptions to enhance online information and reduce misunderstandings.
Analysis of data is a beneficial tool to optimise inventory management by adjusting stock levels based on return trends.
Sustainability-Focused Return Policies
Many 3PLs offer eco-friendly return solutions, including Box-free returns through drop-off kiosks or partner stores and consolidating shipping to reduce emissions. Recycling programs ensure that unsellable items are recycled properly. Donation partnerships involve collaborating with charities to donate returned goods. Carbon-neutral shipping helps in offsetting emissions associated with return logistics.
Product returns cannot be eliminated; and with fast fashion at its peak, returns will never fall, but only increase steadily. While navigating through this challenge, it is crucial to bear in mind the financial and environmental consequences of poor management. It is advisable to adopt an efficient and eco-friendly management system that will result in streamlining time, effort, and money, while shielding the environment.
