Reverse Logistics Planning: Why Peak Season Plans Must Include Return Consideration

disruptions, much adapting still needs to be done from the beginning and last-mile delivery. Reverse logistics planning has always been an essential aspect of supply chain operations and inventory management, but its impact may surpass anything seen in the modern transportation industry. The reason for this is twofold- the increase in sales and the exponential rise of e-commerce sales. Plans for the upcoming peak seasons must include return considerations because the number of returns this season may reach unprecedented levels.

The Challenge of Reverse Logistics Planning and the Holiday Shopping Season

While it remains essential that shippers focus on planning for peak season shopping, the challenge is that they often become so focused on sales and supply that they overlook the risk of returns following the peak sales. Essentially, the peak of the shopping season doesn't end at the end of the year; it continues for months following as returns then begin and affect the bottom-line profits of those peak season sales.

Reverse logistics planning helps retailers prepare for this delayed effect. According to RetailDive, the more companies sell online, the more they should anticipate returns. E-commerce sales rose over 30% in October last year and over 32% again a month later in November. Those numbers have only increased in 2021. As that trend is likely to continue, experts predict as much as a quarter of everything sold this coming holiday season is likely to be returned. Those numbers are expected to be even higher for specific items such as clothing and electronics. This anticipated surge in customer returns represents the very reason why reverse logistics planning is critical for retails and supply chain managers alike.

The Returns Peak Season Will Add Pressure to an Already Stressed Transportation Network

While reverse logistics planning has always been part of the ebb and flow of supply chain management and retail operations, this season's influx will add pressure to the transportation network. According to a study by Deloitte, "The rise of e-commerce over the past decade has driven a 33 percent increase in the return rate of overall retail sales. Digital challenges, consumer behaviors, as well as emerging business models that are unique to e-commerce, result in an online purchase being returned three times more often than a purchase made in a brick-and-mortar store."

As we continue to see more e-commerce sales and digital shopping trends throughout multiple markets, this means more subsequent returns for retailers. And more returns mean less available capacity, which can lead to higher rates and costs for shipping because of the increased risks and challenges associated with the deliveries. This demonstrates the genuine and urgent need for proper reverse logistics management and planning throughout the supply chain network.

Increased Visibility and Data-Driven Insights Will Help Shippers Plan for Returns After the Holidays

As reverse logistics planning becomes more streamlined and practical, it provides increased visibility and better access to real-time data. Access to modern analytics tools and a simplified business intelligence platform can help collect and analyze data faster and more efficiently. This, in turn, can help shippers plan for what may happen based on past, current, and projected consumer trends. Shippers and retailers alike can improve peak season preparations by:

• Embracing business intelligence and innovations.
• Investing in new technology and applications.
• Maintaining a specific returns policy.
• Anticipating returns when pricing and bidding.
• Making decisions based on real-time data and analytics.
• Maintaining communication with customers and vendors.

Be Ready for the Returns Peak Season by Planning Today and Getting the Right Data Insights

As national and global economies continue recovering and the effects of shutdowns and supply chain disruptions are dealt with ahead of the coming peak season, retailers and shippers alike must start preparing now. Proper planning and preparation today with a solid analytics platform and intelligent business access can make a world of difference before, during, and after peak season parcel delivery. Returns have always been a part of the buying-and-selling process, but the rise of digital online shopping has shifted trends and habits. Reverse logistics planning can have a tremendous impact on the transportation industry in ways that have not existed for decades. Contact Intelligent Audit today to learn more and get started.