Heavy goods returns. It’s the elephant in the room (well, maybe not quite as big as an elephant). The process of returning heavy goods is despised by retailers, manufacturers, and consumers. It’s not unusual for the cost of a return to be significantly higher than an item's cost of goods. In addition to refunding the customer and arranging transport, retailers have to decide what to do with the returned item. Your consumers are likely disappointed because of the failed (read: large and expensive), investment in your product.
Ask any reverse logistics company and you’ll find mixed reviews. While your business ensures their profitability, the incurred cost of the transaction can leave a sour taste. Apparently retailers and manufacturers could do a whole lot to change the process, but that hasn’t been the case. However, the times they are a-changin'. ShipMatrix, a logistics consultancy, estimates that heavy-goods deliveries will increase 18% in 2020 as the segment of large deliveries increases. But this segment increase comes with increased frustration for retailers scrambling to manage returns. That’s because (and this may go without saying) heavy goods returns are awful! They cost more. They require more labor. They’re… well, heavy.
Still, brand loyalty depends on efficiently handling returns. Your customer base also depends on it, especially when customers need only post scathing reviews on social media when they aren’t satisfied. The delivery process may be the way a customer remembers the brand, but a return process serves to be the final impression. It isn’t very fun dragging a heavy item back to the store. UPS (in 2019) found that 73% of consumers are likely to change up their brand loyalty based on the returns experience.
While UPS’s report focuses on the returns of small parcels, heavy parcels are fair game for the same consumer expectations. They want transparency, a quick pickup, quick refunds, and quick deliveries of replacement items. When retailers do decide it’s worth it to pay for the return, they have to send in a specialist to repackage the bulky items and ensure there is no damage during the process.
Consumers have demands. They want free return shipping, even if the item isn’t damaged. They want free pickup, especially with heavier items. Some retailers bake the cost of returns into the cost of the item, but many deem it more cost-effective to eat the cost of the item. The trouble is, a lack of data visibility and logistics analytics focused on into returns keeps retailers from making the optimal decision. You don’t know what you don’t know.
What we do know is that heavy item returns are not going away. With manufacturers opening up their entire product lines to online retail, the bulky stuff will continue to be sent. Carriers are gearing up for the changes with peak surcharges on oversized items knowing that the demand for this kind of service will go up. Failure to plan will result in immense cost for retailers and manufacturers, but even with significant planning a lack of visibility into your returns data and a lack of integration with your existing supply chain can cost even more.