Author: Mr. Sapan Kumar Jain, CEO, Blubirch
The reverse supply chains and returns management systems in several existing online marketplaces are plagued with high trust deficit levels and limited customer or seller protection. This results in higher incidence of disputes, increased costs of doing business and/lower revenue realization for retailers and marketplaces. However, amidst these challenges, lies a promising opportunity to bridge the trust gap, enhance customer experience and enhance profitability by revolutionizing returns management through the power of data and technology.
Data-driven decision-making (DDDM) is a crucial aspect of designing an effective IT system for managing returns for high-value electronics. Leveraging data for returns management processes to make informed business decisions can create a significant positive impact through improvement in customer satisfaction, returns process efficiency and profitability.
Let’s understand how data is crucial, how it designs a sound IT system concerning returns and what are the crucial steps involved
When it comes to returns management, DDDM allows businesses to gather valuable insights into buyer/seller behaviour, operational bottlenecks, returns trends by category/brand/condition and recovery inefficiencies. Companies can use this data to optimize pricing strategies, prevent revenue leakages, strengthen the returns process and improve the product. DDDM also enables businesses to adopt a customer-centric approach by providing seamless returns processes, responsive customer support and personalized return policies based on consumer insights.
An integrated IT system offering an end-to-end solution is essential to tackle returns management challenges effectively. An end-to-end system will prevent data silos caused by isolated legacy systems. Such unintegrated systems require a lot of manual processing and also cause discrepancy in data, causing reliability issues. Stakeholders therefore do not have the data and insights to answer one vital question: How can returns be reduced while improving profitability and customer experience? According to surveys by Gartner and KPMG, about 48% of what is returned can be sold at full price and about 30% of returned items lose their value as a result of the complicated reverse supply chain.
Technology plays a critical role in enhancing the transaction experience. One of the keys to reducing the cost of returns is by using data to reduce the volume of returns flowing into the system. For example, returns policy can be tailored to a specific customer by using that particular customer’s transaction history. This will allow the retailer to provide a more restrictive returns policy to a customer who is prone to return often and a more lenient returns policy to customers who rarely return purchases.
As the digital age progresses, data privacy and security become issues of paramount importance. Providing safeguards and failsafe in the preservation of information security and protection of sensitive information requires sophisticated authentication and authorization mechanisms. This ensures greater data integrity and protects customer information. Incorporating audibility and non-repudiation into the technology platform provides accountability and traceability for each transaction, fostering trust and confidence among all stakeholders.
Testing and grading of returned products is important for improving realization during liquidation. System-driven grading of returned items ensures accurate assessment and plays a vital role in improving recovery and hence enhanced bottom line. Data-driven grading assessments help automate disposition decisions on whether to repair, refurbish, restock, return to vendor, claim insurance or recycle and thus avoid unwarranted waste generation and revenue loss because of incorrect classification.
Adopting a customer-centric approach is also significant, as it builds trust and loyalty by providing seamless returns processes and responsive customer support. Optimizing the reverse supply chain through automation can expedite processing and reduce costs.
By tracking data to identify recurring issues, manufacturers can enhance product design and reduce return rates, leading to proactive solutions. Real-time tracking and visibility of returns provide customers and partners with confidence and transparency, while automation in returns processing speeds up operations and minimizes errors.
Also, returns solutions enabled by RA-PaaS (Returns Automation Platform as a Service) can make the investment ROI positive from day one. Also, it offers a lower TCO and better features, powered by ecosystem intelligence as compared to the inhouse developed solution.
To drive innovation, businesses should foster a culture of continuous enhancement and innovation in the analysis of returns data, seeking feedback and refining processes. Environmental considerations are also essential, as compliance with e-waste disposal and recycling regulations exhibits social responsibility and enhances the sustainable image of the firm. Collaborative data-sharing among stakeholders allows for better decision-making and collective identification of industry-wide trends and challenges. By leveraging data in these ways, businesses can create a robust and customer-focused IT system for returns management.
Embracing data and technology as crucial pillars in designing a sound IT system for returns management is a strategic advantage and an essential element of success in the evolving landscape of the Indian secondary market. With these innovative tools, businesses can navigate the challenges and turn them into lucrative opportunities, ensuring sustainable growth in the dynamic world of high-value electronics. By embracing data transparency, technological advancements and robust data security measures, businesses can build trust, enhance operational efficiency and drive sustainable growth in the Indian secondary market.