High return rate has become a major problem for the development of e-commerce

During the pandemic, e-commerce has experienced rapid development. For most retailers and consumer product companies, e-commerce has now become their fastest growing market channel .

It is reported that in 2020 , US consumers spent about $861.12 billion online on retail products , a 44% increase from $598.02 billion in 2019. Last year, online spending accounted for 21.3% of total retail sales , compared with 15.8% the year before. The situation in the UK is no exception, with an online growth rate of more than 37% in 2020, six times that of 2019.

The rapid rise of e-commerce has brought unprecedented opportunities to enterprises , but also brought some challenges that cannot be ignored. One of the biggest problems leading to these challenges is the high return rate and reverse logistics. If these problems are left unchecked , it will be a particularly big blow to enterprises .

Recent shifts in consumer shopping behavior have increased the share of e-commerce in industries such as fashion and beauty, and also in household and electrical appliances . However, the return rate in these industries is also a problem that cannot be underestimated. The large number of returns makes the handling of products more complicated , and there are also cases where large suppliers destroy tens of thousands of unsold or returned stocks .

It is reported that there are five key challenges to the return problem : product refurbishment costs, losses caused by missed sales of returned products , logistics costs, and updating and improving processes. These challenges will continue to exist in 2021 , and there are other issues that companies need to face : such as whether there is suitable warehouse and transportation infrastructure to support effective return management ; lack of digital infrastructure to support correct visibility and decision-making ; lack of attention to return issues when formulating a robust supply chain strategy , etc.

A high return rate will lead to inefficiency in the entire sales process and a decrease in profits . At the same time, since more than 91% of customers regard return policies as an important reference factor when purchasing , product returns undoubtedly need to be taken seriously by more companies.

Careful management of the return process, choosing the right logistics , improving digital infrastructure , and developing a sound return management strategy are all points that sellers need to focus on in their development in order to minimize the losses caused by returns .

E-commerce

return the goods