- E-commerce is now a core shopping channel for retailers, and it's still growing. US e-commerce sales are set to increase at a compound annual growth rate (CAGR) of 14%, from $515 billion in 2018 to $1 trillion in 2023, according to Business Insider Intelligence estimates.
- Booming e-commerce sales have driven product returns through the roof. Return rates for e-commerce purchases are between 25% and 30%, compared to just 9% for in-store purchases, according to Invesp. And Business Insider Intelligence estimates that US e-commerce returns will reach $348 billion by 2023, up from $143 billion in 2018.
- Consumers have high expectations about how returns are handled, and retailers are struggling to find cost-effective ways to meet their demands. Over sixty percent (64%) of shoppers stated they would be hesitant to shop at a retailer ever again if they found issues with the returns process. And retailers do not have the expertise to effectively keep up with how demanding consumers are about returns — 44% of retailers said their margins were negatively impacted by handling and packaging returns, for example.
- Logistics firms are well positioned to solve — and profit from — this problem. Logistics companies can take advantage of their scale and expertise to solve pain points retailers commonly experience as goods move through the reverse supply chain. Opportunities exist to help retailers reduce fraudulent returns, facilitate easy returns, optimize inspection of returned goods, and determine how best to recoup value.
- Logistics companies that succeed in the reverse logistics space will reap near-term benefits while also laying the groundwork for partnerships around long-term, comprehensive supply chain management. Reverse logistics solutions themselves present a lucrative opportunity — but they're also appealing in the potential inroads they offer to supply chain management. The global third-party logistics market is estimated to be valued at $865 billion in 2018, according to Bekryl.
Retailers and logistics companies have historically partnered to push goods through the supply chain and into the hands of consumers — a process commonly referred to as forward logistics. Over the last few years, the importance of an effective supply chain has been further underscored by the rise of digital shopping channels — since 2014, e-commerce sales in the US have grown by over 50%, reaching $453 million in 2017, according to Business Insider Intelligence estimates. However, the [...]