The Role of Returns in e-Commerce with Paul Bello

The convenience of being able to return a product so easily has revolutionised our online shopping experience, with customers now able to shop for a multitude of items, which previously would only have been possible in physical stores.

Many large e-commerces have embraced this approach, with companies such as Amazon, Asos, Zappos and Zalando being amongst the first to popularise easy returns and introduce policies far more generous than was previously possible.

In this episode of LokadTV, we welcome Paul Bello from Revers.io, a company that aims to facilitate customer returns, to discuss with us this change of mindset. We go into more depth on how returns have become such a truly important part of the e-commerce industry and the various impacts that this ease of returns has on a supply chain.

Retailers estimate that around 30% of the items sold online will be returned by customers. We can easily say that this mass of returns has actually created new markets. We learn why this strategy can be challenging from a logistics perspective and discuss how the burden is gradually shifting from the consumer to logistics providers to redistribute stock back to the main hub.

In addition, we try to understand more about the impact that easy returns is having on the environment and how, with customers not being required to drive to a hypermarket, this approach can even be argued to be ecologically beneficial.

Finally, we discuss the future role that returns will take in our shopping experience and debate whether a day will actually come where physical stores do not exist at all, considering just how easy it is to buy and return items.

Timestamps

00:08 Introduction

00:41 Perhaps you could start by telling us a little more about Revers.io?

01:45 Today we are going to talk a little bit about the importance of returns in the e-commerce industry. What is your experience here?

03:20 What are the main benefits of an easy returns policy?

04:10 Is this a recent shift? When were these changes introduced?

05:06 What kind of supply chain challenges does this ease of returns policy introduce?

07:50 How do you differentiate between what is a return for a defect and what is a return just out of taste?

09:50 Here at Lokad, returns are a standard part of an optimization ; how do you work with that?

12:45 Is that what you’ve observed from an IT perspective, that there is a real challenge integrating with ERP systems?

14:06 Fundamentally, with returns, you will be forecasting for their tastes rather than for needs, is this harder to forecast for?

16:30 From an environmental perspective, can you see this willingness to promote returns continuing?

18:10 Is it a challenge from a technical perspective to redistribute stock around a network?

21:26 To conclude, how do we see the future role that returns take in our shopping experience? Will we ever have to go to a store at all?