Returns
According to a survey on European logistics, the return rate for fashion items in Europe such as clothes and shoes is as high as 56%. Compared to the return rate for accessories, although relatively low, still accounts for around 30%. As clothing usually needs to be tried on, the likelihood of returns is higher. In addition, the survey also shows that in 68% of cases, the return of an electronic product is due to it being too difficult to operate. There are also differences between countries in patterns of return, according to the survey. The highest rates of returns stem from Germany (41%), the Netherlands (36%), and the United Kingdom (32%). Interestingly, Spaniards and Italians rate a ‘hassle-free returns process’ as the most important factor when shopping online yet have the lowest return rates (18% and 13% respectively).
In a survey of 360 sellers, respondents with over 4,000 consumers from companies of all sizes in the U.S., UK, France, and Spain, (commissioned by logistics provider GXO and conducted by Statista) report that over one-third of retailers said they have seen an increase in online returns in the past year. Another 37% said returns have increased their operating costs. 42% of consumers surveyed said they have returned a garment purchased online in the past 12 months, and 57% said they think ahead and plan for returns when shopping online. The National Retail Federation (NRF) expects a significant increase in global reverse logistics demand, and reports that “spending on global reverse logistics technologies will spike in 2021 — forecast last year to hit $604 billion by 2025 — as retailers seek to alleviate a major pain point in the shopping journey and minimize the costs of a returned product”.
Reverse logistics
The role of reverse logistics in the transaction process should not be underestimated. Lets look at the Israeli market as an example: Next and ASOS, well-known British apparel brands, suffer from a high percentage of returns, despite their promising online sales in Israel. Online consumers generally expect to benefit from return services at no additional cost, which contradicts the expectations of cross-border sellers to maintain high traffic and high profits at the same time.
Exelot has responded to this pain point by providing quality reverse logistics services to help sellers achieve better performance in the Israeli market. In fact, Exelot’s reverse logistics in Israel has been highly recognized by buyers and sellers, allowing buyers to save more while reducing merchant losses. Reverse logistics is a process where a merchant customer entrusts a third-party logistics company to deliver goods from the customer’s designated location to the merchant customer’s location. The reverse logistics process is driven by the merchant customer, and the logistics costs are centrally settled between the merchant customer and the third-party logistics company. The whole process requires strong ERP docking system support from both the merchant customer and the logistics company.
In the case of cross-border e-commerce, in view of the distance to be covered, the return shipping costs are often higher than the value of the goods themselves, which cancels out profit and equates to a loss for the seller. In peak shopping seasons, cross-border returns are relatively troublesome, and some merchants in the past have simply not given their customers the option to send back their goods. Economic losses at the same time also encouraged some users to return goods in an unpleasant manner due to their frustrations.