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How reverse logistics can make or break Africa’s e-commerce businesses
By our News Team | 2023
Returns by online shoppers are rising by around 40%. E-tailers need a more customer-focused and environmentally friendly returns process.
As e-commerce grows in popularity and competition increases among online retailers, there is intensified pressure to make product return policies as quick and easy as possible for customers.
With research showing that returns by online shoppers are rising year-on-year by around 40% globally, a slick and effective ‘reverse logistics’ capability is just as important as competitive product pricing and fast delivery.
Photo by Tima Miroshnichenko from Pexels
“As online shopping matures, the expectations of consumers increase too,” says Nathalie Schooling, CEO of Nlightencx, an Africa-focused customer experience agency.
“They demand convenience from every aspect of their online shopping experience, including easily returning the goods they don’t want. So, e-tailers wishing to remain competitive need to take this part of the customer journey seriously.”
According to Schooling, some local e-commerce platforms regard returns and ‘reverse logistics’ (sending goods back along the supply chain to the original supplier) as a costly and unwanted burden.
Consequently, customers are sometimes charged for returns, or the process has been made unwieldy and complicated to deter shoppers. This can lead to major frustration.
But buying online often means returns are sometimes inevitable. Research cited by courier company DHL, for example, indicates that half of all clothing items bought online are returned.
“This isn’t unreasonable, given that online shoppers can’t try them on in a changing room before they buy. But if the process of sending back the clothes they don’t want isn’t hassle-free, they either won’t shop online again, or they won’t shop with that e-commerce platform.
“So effective returns management shouldn’t be a chore or a cost centre for the business; it must be seen as a critical part of a customer acquisition and retention strategy.”
A survey by Deloitte & Arvato shows that a well-managed reverse logistics process has the potential to reclaim up to 32% of original product value.
Sustainability and the Circular Economy
“For any business, effective reverse logistics must feed into the Circular Economy,” emphasises Schooling.
“Not only is it a moral imperative, but organisations are increasingly under scrutiny for their sustainability credentials, and any mis-step in this regard can impact the bottom line and organisational reputation.”
The Circular Economy envisages the supply chain as a closed loop, rather than being one-directional from the manufacturer to the end user. Products that are unused, unwanted or damaged are repurposed for other uses rather than simply being discarded in landfills or incinerated. Goods that cannot be re-used in some way are disposed of using new and more sustainable end-of-life recycling solutions.
Schooling believes technology such as automation, AI and machine learning should be harnessed for more cost-effective reverse logistics that serves the interest of customers.
“To truly streamline the returns process, businesses need to be gathering ongoing customer insights to find out where the customer concerns are, as well as understanding bottlenecks in the logistics process, and technology is a great enabler for this.”
Closing communication gaps in this process, she believes, is the ultimate source of effective returns management, and where businesses should be focussing their energy. “The most important communication gap to close is with the customer. They are the ones you need to be empathising with throughout the often-frustrating returns journey.”
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