Edition 59
Returning Thoughts
by Paul Rupnow, Andlor Systems

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What is Omni-Channel Retail?
For those of you who are new to the term, Omni-Channel Retailing is “the evolution of multi-channel retailing, but is concentrated more on a seamless approach to the consumer experience through all available shopping channels, i.e. mobile internet devices, computers, bricks-and-mortar, television, radio, direct mail, catalog and so on” (Definition from Wikipedia). For the customers, this translates to a consistent and positive experience, no matter what part of the retailer you are dealing with, since all channels should have full knowledge of your activities, experiences and history with each channel. For Returns, this should mean an easy positive experience as well. However, how will these improved customer experiences impact the customer returns experience? And also importantly, how will the Omni-Channel evolution impact the Reverse Logistics processing for the Retailer, the product manufacturers and the Reverse Logistics processing partners?

In his presentation, titled “Returns in the Omni Channel”, organized by the RLA Consumer Products Committee, Dr. Dale Rogers, Professor, Logistics and Supply Chain Management at Rutgers University, provided an overview of the Omni-Channel and some of the impact it will have on Returns and Reverse Logistics. (Wed, Nov 20, 2013, video presentation available at Consumer Products Committee page at the RLA.org website: https://rltshows.com/~reversel/company_focuscommittees_index5.php?showlist=true&FC=4 )



Retailers have embraced the Omni-Channel concept based on demands from their consumers. Consumers seek a consistent shopping experience whether they are at bricks and mortar store, the web store or on a mobile store. Consumers now expect a “Shopping Simplified” experience at their fingertips; whether they are at the store, at a kiosk or on-line they seek: the same products, the same prices, the same knowledge, the same assistance, the same services and a connected customer service experience. This also flows through to a positive and “simplified” returns experience.

Based on Dr. Rogers introduction, I have started to assemble more information on some of the impacts of this new Omni Channel on Reverse Logistics operations.

How will Omni-Channel Impact Reverse Logistics for a Retailer
In my research, I have assembled a starting list of some of the Reverse Logistics impacts that are arising as a result of Omni-Channel:

1. Pressure from competition forcing retailers to use returns as a competitive weapon

2. Risk free shopping experience. Customers seek to reduce their risk when purchasing an item, especially when on-line shopping. A convenient returns policy and process helps reduce the risk and is essential to a complete customer experience. There is a very significant impact resulting from a customer’s return experience:

85% of customers WILL NOT shop with you again if the return process is not convenient.

95% of customers WILL shop with you again if the returns process is convenient

(Source: Independent Study – Harris Interactive provided in a presentation “Reverse Logistics in an Omni-Channel Environment” by Rob Saper, VP Supply Chain Logistics for OfficeMax at the RLA conference Vegas 2013)



3. Multiple returns options – no matter which channel the customer purchased the items, they may seek to return it using the most convenient method: in store, via carrier, via drop points, etc. As a result, on-line returns now may be taken to the store. Or store bought items now may be returned via a carrier in a shipment.

4. May Reduce Returns! Pre-Purchase Research - Progressive Omni-Channel retailers want to assist customers with access to better information and expertise to help reduce purchase risk. The retailer may do this with an on-site expert or from online sources, even encouraging consumers to use their mobile device while in the store. Currently, 50% of consumers will use a mobile device to help shop for Consumer Electronics. (Source: “State of the CE Industry” presentation by Steve Koenig, Director, Industry Analysis, Consumer Electronics Association (CEA) for RLA Consumer Products committee, Dec 18 2013). Better information leads to better purchase decisions and less returns.

5. May Reduce Returns! Post-Purchase Research – better Omni-Channel experiences encourage more contact with consumers even after a purchase. This includes encouraging providing data or encouraging the customer to use online research methods after a purchase. This is another opportunity to reduce returns. As customers get better at helping themselves setup, troubleshoot, or arrange for repair, there will be a positive impact with a reduction in the number of returns (Source: CEA)

Bottom line, the Omni-Channel will result in some reductions, some increases and definitely more complexity for the Reverse Logistics teams at the retailers.

This Part 1 article is meant to be an introduction and starting point to expose some of the issues and impacts of the Omni-Channel. Next month, in Part 2 – Omni-Channel Retail Reverse Logistics Challenges and Tips, I will assemble and present some key issues, tips and best practices. Please email me ( paul@andlor.com ) any ideas, wisdom and tips that you have seen or experienced so we can share and prepare, since collaboration helps us all.

Good Luck!

Paul Rupnow
RLM
Paul Rupnow - Director, Reverse Logistics Systems, Andlor Logistics Systems Inc.
Editor - Reverse Logistics Professional Report Business Insights and Strategies for Managing Product Returns

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