Online returns rates have tripled in 5 years, reaching 21% in the U.S.A. How does reverse logistics meet this challenge?
According to the NRF and Appriss Retail study of 2022, for every US$1 billion of goods sold in the U.S.A., returns amount to US$166 million. Honestly, I think this figure is underestimated. In Europe, according to our study carried out in June 2023, the average return rate for e-tailers is 25% by value. But reverse logistics isn’t just about managing returns. It actually begins when the purchase is completed and the customer leaves the store or the website. What should I do, as a retailer, if a product doesn’t work or is damaged during delivery? If it needs repairing? Reverse logistics is the keystone of the circular economy, through all its different stages, following “repackaging, repair, resell, reuse and recycling”. However, it’s important to bear in mind that recycling is always the worst option for a retailer, in terms of value creation. It often costs more energy to make something new from recycled materials than to make a brand-new product. Returns management is an economic battle in the retail industry right now, that will have major financial implications over the next decade. In my opinion, technological innovation should provide upcycling solutions, not recycling ones.
Repackaging, repair, resell, reuse and recycling are distinct steps.
