Transalis to help retailers tackle mounting costs of product returns

Retailers battling the increasingly heavy burden of product returns on profit margins are set to benefit from fresh solutions engineered by a UK tech firm.

Transalis is unveiling its ‘capture, connect, secure’ approach for the retail sector at the Gartner Supply Chain Executive Conference 2019, the world’s most important gathering of supply chain leaders.

Over 900 attendees, 50 exhibitors and 35 Gartner analysts are attending the three-day event in Barcelona, Spain, to gain a strategic view of trends shaping the supply chain landscape.

Transalis believes one of these is the logistical challenge of managing and monetising popular ‘buy online, return in store’ product returns policies.

While retailers aim to be ‘customer first’ brands, the rise of the ‘serial returner’ is being directly linked with hidden costs and unintended risk areas that threaten margins.

Transalis, whose cloud-based platform already underpins billions of pounds’ worth of global trade by streamlining supply chain documentation, believes better use of technology by bricks-and-mortar retailers can inform a cost reduction model to solve many of the returns headaches.

The company’s Sales and Marketing Director Marc Stares, who is presenting at the conference, said: “As consumer habits continue to favour online purchases, creating differentiation is proving difficult. Offering the convenience of easy returns is many a retailer’s answer.

“However, with typical return rates for some product lines as high as 35%, this has created a significant logistical challenge and a mounting commercial issue that is having a dramatic impact on the bottom line.

“Many retailers still consider their online businesses as standalone operations, separate from in-store. This can create an issue for systems integration at the very time they want to achieve a seamless shopping experience.

“Different systems are meant to be working together when in reality they have not been designed to interact. It’s a problem that affects financial systems, IT, scanning, data entry, inventory control and other activities, introducing the potential for duplication and error in the tracking of goods and costs.”

Marc points to evidence of a growing problem revealed in a new report, ‘Buy Online, Return in Store: The Challenges and Opportunities of Product Returns in a Multichannel Environment’.

In it, researchers at the University of Portsmouth working with the retailer-manufacturer group, ECR Community, identified huge complexity and duplication of effort in managing physical product returns.

Particular issues were seen in the reconciliation of online and in-store invoicing, the matching of receipts and refunds, anomalies between stock levels and financial systems, and different till systems capturing different kinds of data.

The underlying issue, the report found, is making sure that systems can talk to each other in near real-time to reconcile transactions and inventory, and that both the business and the customer have reliable information on their accounts.

“Businesses are faced with the dilemma of offering high levels of customer service at the same time as mitigating losses from customer transactions,” said Marc. “We know that free delivery positively impacts customers’ online buying decisions. When that is backed by the offer of free product returns, it can drive customers to order additional products they have no intention of keeping. KPMG has found that 35% of women’s fashion online purchases are intentional returns. This causes very real tensions between the customer service teams and other parts of the business such as loss prevention and finance.

“The Portsmouth research, combined with our own client feedback, shows that siloed, disparate systems are a barrier to gaining a holistic view of the true impact of a ‘buy online, return in store’ returns policy. The answer lies in ownership at board level and the use of cloud data reporting to provide high-level visibility of the complete process thus allowing each silo to take action to optimise and monitor their processes.

“To help with this, we have created technological solutions that capture data at each handover point, connect the disparate data sources into meaningful insight, and secure actionable outcomes.”   

The Gartner Supply Chain Executive Conference 2019, taking place from 17 – 19 June, 2019, is the latest industry event of its kind to be attended by Transalis.

 

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