Automation helps fashion retailers reduce cost of repeat refunders, says Exotec

For retailers, the issue of reverse logistics can be a perplexing one: companies need a rapid means of processing millions of returns and getting items back into sellable stock fast to prevent lost margins. This headache can be reduced by embracing modern warehouse automation that is best equipped to deal with returns, writes Simon Jones, sales executive at Exotec.

This is even more critical for the fashion industry as seasons are very short: lines are moved quickly to “sale” status and discounted, destroying margins and revenues. Many omnichannel retailers can offer free returns in store even for online purchases, which gives customers the chance to browse and potentially buy other products, while enabling in-store employees to place goods back on the shelf as soon as they’ve been checked.

However, this is not the case for pure-play online fashion retailers, many of which sell hundreds of thousands of items between £10 and £25 at low margins. With such high return rates, this is costing retailers a great deal of money if they’re unable to get returned items checked, cleaned, and repacked rapidly before returning them to the pick face in time to sell them at full price. Even with return fees, it is a costly process and one that must be managed efficiently.”

Online retailers must ensure that reverse logistics is given just as much attention as the rest of the operation.

Many retail warehouses use manual picking operations for their ecommerce fulfilment, requiring four to five times the labour to fulfil orders compared to high-performance automated robotic systems. Productivity takes a further hit when putting away and re-picking returned items in a manual warehouse.

Automated systems, in contrast, can speed up the process by quickly scanning returned items into a mixed SKU bin, so they go back into the main inventory. This eliminates walking time to each stock location for each SKU or putting them in a pick-first returns area, making the process much faster and less labour-intensive. Then, when another customer orders a specific SKU as part of their order, a returned unit is always presented at the pick station first. No consolidation or sortation is required.

Overhauling returns processes can be the difference between having to offload a returned item at bargain basement prices and being able to resell it at full price. At a time when profit margins are being squeezed and consumers have become accustomed to returning purchases at will, the importance of slick, efficient reverse logistics cannot be overstated.

Learn how leading retailers are handling returns in the recently published DeliveryX Returns 2024 report. Harnessing results of our ConsumerX research, the report presents how charging for returns has impacted customer loyalty.

Advancing technology is also under a spotlight, both for minimising returns and limiting the environmental impact of reverse logistics. Download the full report here.

We deliver!
Our editor picks some choice pieces from the analysis flow and sends them to your inbox every Wednesday. Dedicated research report previews will also come direct to you. Subscribe for the emails.

Why not join us on Linkedin and you’ll get the best updates on our research and analysis – UK, Europe and Global – in your feed.