The advent of online shopping, while a progressive step forward in ease and convenience, has undoubtedly changed the face of retail beyond recognition. At the same time, the ease of online shopping has fundamentally changed customer behaviour. Where once, consumers would walk into bricks-and-mortar stores to see, test, feel and try-on products before purchasing, the rise of hassle-free incentives such as free delivery and returns mean customers are now much more inclined to over-purchase as a way to ‘try before you buy’.
For some of the UK’s largest retailers though, the cost of servicing these returns has spiralled to almost £60bn a year3, which doesn’t account for the revenue lost when goods are damaged or go missing during the returns process. As a result, this has left many businesses facing the twin dilemma of remaining competitive by offering a free returns facility, while ensuring margins are not wiped out in the process – and increasingly the choice of packaging and packing procedures is proving key.
For instance, clothing regularly goes missing during the returns process, whilst electrical goods can end up damaged either because the customer cannot easily re-use the original packaging to return the items or the packaging has not been designed to survive the rigorous return journey back to the warehouse. In some cases, dependent on the nature of the product, it may be that a bespoke packaging solution is the best preventative measure for unsaleable stock.
To combat this, firms need to start by using the right choice of packaging for their product, whereby it should be easy for the customer to return and durable enough to withstand the multiple points of contact through the supply chain.
A great example of this is when a leading British supermarket was faced with rising incidents of damage to TV’s returned to its stores across the UK. Early investigations revealed that the boxes being supplied for television returns were outdated and inadequate, and meant that whilst some TVs left the supermarket for the returns centre as a high value re-saleable item, they would often arrive as completely non-sellable due to four or five TVs being placed in one box which frequently smashed together and damaged the screens.
Working with the retailer, Antalis devised a bespoke corrugate solution that included four box sizes designed to snugly fit individual TVs, within which the internal protection solution was a polyethylene foam - a dense foam product which can be used to make bespoke shapes to create end caps, protecting the product from any drops or other impact. Following the roll-out of the new system, the supermarket was able to significantly reduce damage to TV returns, which ultimately saved the retailer hundreds of thousands of pounds a year.
Equally important for retailers looking to ramp up their returns process is taking a cold hard look at their existing operations and understanding the goods flow. This requires the business or any outsourced logistical partner to ask tough questions such as ‘how many touch points are there throughout the returns process?’ and ‘how many opportunities are there for goods to get damaged or go missing?’
When you consider that the average returned purchase in the UK passes through seven pairs of hands before it is listed for resale, it’s easy to see why it can be a long and costly process. Often packages are initially returned to a local processing plan, where after being collated with other returns are then sent on to a centralised warehouse for cleaning and repackaging before finally making its way to a distribution centre, ready for the next customer.
At Antalis,c we are advising more and more retailers that instead of sending goods, which have been returned to store, back to a central distribution warehouse for sorting, a more efficient and cost-effective solution is to provide packaging to staff so that such goods can be repacked in-store, ready to be sold to the next customer.
Finally, another crucial way to minimise touchpoints during the returns process is to consider how packaging can help with warehouse optimisation. With space increasingly at a premium in the logistics environment, using solutions such as recyclable palletised containers or mobile storage racks can go a long way not only in saving valuable warehousing space, but also in creating a slick returns process that reduces chances of lost revenue due to goods being damaged.
In fact, the challenges around returns have become so great that Antalis Packaging recently unveiled a new team exclusively dedicated to helping its e-commerce and supply chain customers address such issues using the latest innovations in packaging, packaging design, automation and logistics & warehousing. As part of the ‘Challenge Antalis’ initiative, a member of the new e-commerce and logistics team will conduct a free Smart Audit of a business’s premises and packaging, and make recommendations for improvements – a service which has already resulted in some customers seeing their packaging costs slashing by a whopping 70%.
Author: Andrew Smedley is head of e-commerce and logistical packaging at Antalis
Image courtesy of Antalis