Reverse logistics management is a multilayered and nuanced process that presents a manufacturer with several challenges including tracking routing status and warranty, beefing up analytics, analyzing target market, handling suppliers and contractors, and driving efficiency in repair processes. Market size analysis for any reverse logistics process has become even more challenging due to rapid growth in the number of customers and their rapidly changing behavior.
If the target market is not analyzed properly, reverse logistics management fails and businesses fail to provide customer satisfaction. Additionally, it increases resource investment levels and storage and distribution costs. Therefore, it is important for the reverse logistics businesses, especially e-commerce, to understand that with the increasing volume of returns, they need to have a proper market analysis mechanism in place.
At Infiniti Research, we understand that better reverse logistics management can act as a sort of asset recovery for manufacturers, so they can extract as much value from the product as possible, providing the second return of investment. And to help companies in careful market size analysis and better reverse logistics management, our team of experts has highlighted the four best strategies that can help market players to become global leaders.
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Strategies for Better Reverse Logistics Management
Strategy #1: Adopt new repair and return policies
With retail facing an immense number of returns today, generous return policies have become a competitive necessity. Retailers are also taking better and more steps to reduce the abuse of those policies like Amazon customers who have returned too many items have had their accounts closed without any warning. Both retailers and manufacturers also need to empower customer service associates to make returns more efficient.
Strategy #2: Better collaboration with retailers
Manufacturers and retailers need to take a closer look at their vendor agreements. While the price has often been a matter of dispute, many are re-evaluating their policies of return. For big products like furniture and electronic items, returns are a major issue. So, good collaboration between the supplier and retailer is the need of the hour for better reverse logistics management.
Strategy #3: Optimize your reverse logistics process with data
Manufacturers and retailers both should look for new platforms and third-party partners to sort, resell, process or dispose of items to have better reverse logistics process. With the help of data, return processing becomes cheaper and partners can easily liquidate and handle the inventory. Many manufacturers are now using sensors, IoT, and connectivity to monitor, troubleshoot or repair products in the field and minimize the need for consumers to send products back. Also, they are designing their connected products with software and operating systems that can be trouble shooted or updated from anywhere. Some of the manufacturers and retailers are also using easy-to-replace components and hardware that can be sent to consumers for self-repair. Data they track can include the condition of the products, the volume of returns, and the reason for return along with the percentage of sales.
Strategy #4: Rethinking transportation and logistics
One strategy that suppliers can use today for better reverse logistics management and to reduce costs and improve efficiency is to combine delivery and pickup. With the increasing number of consumer purchasing online, the volume of returns has increased. It is likely that firms in the logistics industry will need to address the growing number of returns by finding drains where they can resell slow-moving and returned products.
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Strategy #5: Plan effective return strategy
For better supply chain and reverse logistics management, retailers need to have an effective strategy that should expedite returns wherever the customer desires and get the returned items back in the market in the fastest and most efficient manner possible. Retailers can also seek the help of third-party logistics or establish centers specifically designed for the handling, collection, and distribution of returns. These centers should be equipped with technology, systems, and infrastructure dedicated to moving returns back upstream. Having a dedicated path for reverse logistics management can help you more efficiently reduce holding, handle returns, and process costs, and boost the customer experience.
How Market Sizing Solutions Can Help in Reverse Logistics Management?
With a proper market sizing solution in hand, it becomes easy for the retailers and manufacturers to divide the potential consumer base into segments. It further helps in identifying the target market according to demographics and psychographics. Regardless of the fact that whether a company is rebranding, relaunching, or introducing a product, a market size analysis helps in investigating how the target market perceives that product. Market size analysis also helps in dissecting product benefits and features and matches them up with a potential need that exists within the mind of the targeted consumer to avoid more returns. This way market size analysis helps a firm to save itself from potential loss caused by reverse logistics. Conducting a market analysis also helps companies to identify when to discontinue products.
Unsatisfied customer service is leading to revenue loss for your business? Request a free proposal to know how analyzing customer behavior can help you better in reverse logistics management.
