5 Ways to Prepare for the Surge of eCommerce Returns: Post-Holiday Supply Chain Management

Guest Blog by Steve Syverson, Senior Director of NFI eCom

Ecommerce brands know that returns after the holiday season are inevitable. While we can’t prevent it, customers can be well-prepared and lessen the blow to business by utilizing technology to analyze data-driven trends, leveraging a 3PL partnership, and working sustainably.

Here are five ways brands can prepare for the post-holiday surge in eCommerce returns:

1. Understand the Impact of Returns on Profitability

For eCommerce brands, returns are often an overlooked line item. Companies are looking to balance a returns program for consumers that is reasonably accommodating but doesn’t cause as harsh of a decline in profitability. Many factors of returns contribute to a loss of revenue, including the product cost, processing time, packaging, and the value of products after they are returned.

Narvar, a post-purchase platform, conducted a consumer survey that clarified the impact returns could have on companies and customer behaviors in their 2024 State of Returns Report. With eCommerce return rates rising, the report highlights that nearly 39% of consumers now return items purchased online at least once a month, and last year’s merchandise returned in the US amounted to nearly $744 billion. 

Returns don’t have to be such a headache for high-growth brands. Shippers are partnering with their supply chain providers to turn the returns experience into a key loyalty driver with best practices, incentives, and technology to allow brands to gain control of the returns experience and, ultimately, turn it into a revenue opportunity.

2. Use Data to Predict Return Trends

Analyzing data makes predicting return trends easier. Once you see the trends of the past, you can create a data-driven strategy to tackle future influxes in returns. Historical data on customer behavior, rate of returns, conditions, frequencies, and seasons can help pinpoint any common patterns to prepare for. 

NFI eCom partners with their shippers to report on these behaviors throughout the year. Using precise technology to analyze product volume, the team sees trends as they occur and reviews them with customers quarterly.

3. Leverage Tech Solutions for Smoother Returns

Leveraging a tech solution can be beneficial to ensure returns are processed smoothly and provide companies with increased visibility into orders. For example, NFI eCom uses a processing platform that provides item-level data for each return.

Any return initiated through a Return Merchandise Authorization provider (RMA) must be received and scanned in. Technology platforms will then capture images with grading requirements based on that specific SKU. These grading requirements differ for various product types. Apparel, for example, might be graded in a return process based on stains or rips. Their scanners help us decide what next steps can be taken with that item based on its condition, whether that be for resale, donation, or disposal.

Not only does the right technology help process returns more smoothly, but it also allows companies to see trends in return rates and even detect fraud. For specific products, they can track the return rate in comparison to other products by identifying which SKUs are prone to returns. While it scans for grading requirements and return trends, it also scans for accuracy to confirm that the returned item is correct, which can save companies significant revenue losses caused by fraudulent returns. Utilizing tech solutions with your 3PL partner can significantly close the gap in catching fraudulent returns.

4. Know the Benefits of 3PL Partnerships

Returns can be complex when reviewing grading requirements, revenue optimization, fraud, and tracking trends. Partnering with a third-party logistics provider (3PL)  can lift the burden. Companies like NFI have a labor force that can handle the volume of post-peak returns, saving you the hassle. These experts have the technology in place to work through returns quickly to maximize recovery and return on profitability.

With eCommerce, Distribution, Transportation, and Port Services working together seamlessly, one company can execute the entire purchase and return process of products. By partnering with a 3PL, brands receive support with everything from consolidation, resale, restocking, and more. Some merchants have products that cannot be sold at the same caliber or through the same channels once they are returned in certain conditions. NFI can help you take the next steps to recovery while also prioritizing sustainability.

5. Sustainably Process Returns

Returns not only heavily impact revenue but can dramatically impact companies’ carbon footprints. When faced with an influx of returns, it is important to analyze the most eco-friendly practices for conducting the returns process.

NFI values sustainability and can help customers make the right decisions when processing returns to save money and reduce environmental impact. Using a 3PL with a large network helps reduce your carbon footprint with fewer touches between each step, from transporting and storing to the product’s final destination.

NFI eCom’s team of experts also uses data-driven research and results to opt for eco-friendly packaging for shipments. It also helps you discover the most sustainable final destination for a returned product, whether that is to resell, donate to charity, or dispose of it.

Amid the challenging eCommerce peak season, prepare for the post-holiday influx of product returns by utilizing technology to analyze data-driven trends, leveraging a 3PL, and working sustainably to protect your revenue. NFI eCom can support your post-holiday supply chain management by offering multichannel solutions, tech-enabled capabilities, and customized services so your platforms, operations, and partners are always connected from the beginning to the end of the product lifecycle. Visit our eCom solutions page to learn more about our capabilities.

Sources:

/2024_State_of_Returns_Report_Narvar

Steve Syverson is a Senior Director at NFI, a leading supply chain solutions provider in North America. With an extensive background in eCommerce and fulfillment strategies, Syverson helps brands scale by leveraging the assets and capabilities NFI eCom has to offer.