Ever-increasing scrutiny of brands’ sustainability practices and a more challenging economic environment are prompting brands to find better solutions for one of the biggest problems in online shopping: returns.
And with the holiday season in full swing, retailers are gearing up for the busiest returns season of the year.
By streamlining logistics through third-party partners, leveraging secondhand markets and designing for repairability, brands are finding overlaps between sustainable practices and cost recovery.
“When [businesses] receive a returned product, they have a lot of options—the easiest one is trashing it,” explained Olivia Montgomery, associate principal analyst at Gartner-owned market research firm Software Advice. But based on a new survey of small and medium-sized businesses focused on reverse logistics, Software Advice found that retailers prioritizing sustainability in their returns management strategy are seeing “increases in customer satisfaction,” she said. “A lot of them are able to recoup the majority of the cost of a returned item.”
In 2022, Americans returned roughly $816 billion worth of stuff, according to the National Retail Federation. Over the last several years, ecommerce has transformed the landscape of returns, making it more common for people to order multiple items up front, intending to only keep the one that works best. As inflation and interest rate hikes squeeze retailers, that’s become more of a problem, prompting changes that not only put a few more dollars in the pocket of businesses but also prevent returned items from ending up in landfills.
Less packaging, less carbon, less friction
Reverse logistics company Happy Returns, now owned by UPS, aims to make returning online purchases way less annoying for the buyer and simpler for the online retailer.
By serving as the logistical connection between a network of drop-off locations, the seller and the buyer, Happy Returns lets people return a product without having to repackage it, print a shipping label or get to a post office during business hours.
Recently, the company started using reusable totes to take items to and from its warehouses, eliminating the need for single-use boxes and multiple packages—saving on both materials and shipping emissions.
“We [were] doing all of this shipping from the drop-off points to the hubs,” said David Sobie, co-founder and CEO of Happy Returns. “Instead of shipping in cardboard, why don’t we ship in a reusable tote and eliminate cardboard from the equation?”
