Reducing product returns and increasing sustainability

  • June 12, 2019
There is a very big brown packet in distribution warehouse.

Sustainability is a pressing issue for an increasing number of global organizations. What once felt like a buzzword is now a strategic initiative. More companies are looking to:

  • Cut non-recyclable materials
  • In troduce biodegradable products and packaging
  • Optimize transportation to minimize CO2 output

But what other to ways can both brick-and-mortar and ecommerce retailers explore to reduce their environmental footprint? A good place to start is evaluating the relationship between packaging and the damage that occurs within your delivery channels.

Products returned due to fulfillment damage pose several challenges and opportunities. For starters, you need to closely evaluate the impact returned items have on the environment (for example, increased packaging waste and additional transit emissions), and then strategically align your resolution efforts. There are many ways to reduce the volume of return shipments. There are two areas that seem obvious, yet the strategies described aren’t one-size fits all. A blend of both methods will ultimately prove to be the way forward.

  1. Improve your packaging performance

    The quickest way to reduce the volume of returns is to implement packaging performance improvements on the front-end of the sale. This approach minimizes shipping-related damage. Customer demand for faster ecommerce delivery and better service constantly challenge packaging, and it’s a moving target.

    If you’re a manufacturer, products with healthy profit margins serve as key enablers for packaging improvements and make upstream investment decisions much easier. The sole purpose is to minimize the risk of damage-related returns for both you and your retail partners. There’s also a compelling sustainability story behind a properly engineered packaged product that can ship in its own container over all modes of last-mile delivery.

  2. Increase customer service and repair opportunities

    The long-term play to address returns lands "out in the field" as a shared service. Lower profit margins make packaging investment more difficult, so organizations must also increase customer service levels in the field. The sole purpose of this effort is to avoid the "return/replace the item cycle", which substantially reduces sustainability. This strategy can offer significant benefits to manufacturers, retailers and customers.

    For low margin products, the slightest adjustment to your packaging system can mean the difference between profit and loss. Toeing this line is the challenge that high volume manufacturers wrestle with regardless of delivery channel. Adding a service/repair operation in the field can help retailers keep internet pricing competitive, It also ensures the packaging’s environmental impact remains minimal. and allows the retailer to engage customers: interactions that may lead to additional sales revenue. If a packaged product arrives damaged, most customers would consider the experience sub-par — if not unacceptable. Savvy business leaders see this outcome as an opportunity. The goal: to advance relationships, as either a manufacturer or a retailer, with the customer. If done right, this level of investment could generate “win-win” opportunities across the network.

    Both options offer suggestions that help you solve the relationship between packaging and damage. However, you’ll need to invest into the value chain. We recommend conduct the proper due diligence before you advance too far in either option.

— By Kyle Ous

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