Reverse Logistics are key in customer satisfaction

Mark Eldridge, Business Development and Marketing Director at Spring Global Mail was interviewed by Het Financieele Dagblad for their December issue on Supply Chain Management.

Please find a copy of the original Dutch article here and read on for the English translation

Reverse Logistics are key in customer satisfaction

Spring Global Mail are a joint venture between PostNL and Royal Mail and offer international mail and parcel solutions to companies. Since five years the traditional mail volumes, such as bank statements and invoices, have been declining rapidly. For Direct Mail it is the same, although there is somewhat of a counter reaction as people are getting tired of being spammed in their inboxes and value physical DM again. 

Mark Eldridge, Business Development & Marketing Director at Spring, “The online growth offers opportunities. Where it used to gravitate towards letters, we now see a shift to the delivery of online purchases. Also most bariers for purchasing online on foreign websites, like VAT, consumer safety and delivery guarantees, are no longer the case within the EU. One of the last remaining bariers nowadays is “What are my options if I don’t like the product and I want to return it?”. With this in mind Spring have created a set of return solutions which we offer to international businesses. With Spring Reverse Logistics we make sure that no matter where customers are located in the EU they can return their goods easily and free of charge.”

What’s your strength?
“The method is pretty straightforward, we have created one distribution network that combines the local return options. In this heavily changing market the challenge for any postal organisation is to reinvent themselves and use their current networks efficiently. In most countries it is possible to return items via the post office and on a local level this tends to work. However, the trick is to combine these networks in such a way that a French consumer who bought something of a English website can easily download the correct return label and drop it off at the nearest collection point. Spring collect these international returns in its own depot and return them in fixed frequencies or once the optimal volume has been reached, like a full truck load or pallet.” 

What are the main reasons for returning products?
“It strongly depends on in which phase of the product life cycle the product is. When purchasing a product reasons vary from the wrong size, the wrong colour or a damaged product. Fashion retailers see that people order extra items so they can first try the garments on in the comfort of their own homes before making a final decision. Between 30 and 40% of the total orders are being returned. The risk is that if a garment isn’t returned quickly it runs out of fashion and cannot be sold anymore. For fashion retailers it is therefore key that they have their orders returned quickly.
When a product is already in use then the main reasons are repair, replace or recall. Moreover, some manufacturers have legal obligations concerning waste management, for instance manufacturers of cartridges and consumer electronics. Customers must be able to easily return the product in order for the manufacturer to recycle or destroy the product accordingly. Our Reverse Logistics are therefore build around the different stages of the product life cycle and consist of return, repair/replace, recall and recycle.”

How complicated are international returns?
“Although suppliers differ and each have their own set of specifications, we aim to offer fitting solutions for everyone. Some time ago there was a shoe manufacturer who ran into the issue that “customers” ordered shoes online and swopped the new pair with a old pair and then returned it. By the time the manufacturer could check the returns, the customer had already been reimbursed. Through the regular logistical network it took on average three weeks before they had the items returned and that put them in a tight spot; honest customers shouldn’t have to wait three weeks before they were reimbursed, now should they? For this particular manufacturer we have been able to set up a regional network whereby we take pictures of the returned shoes as soon as they arrive in our depot and forward them to the manufacturer. They can quickly check if they indeed received the proper pair and reimburse the customer within three working days.”

What are the advantages in having a return policy for web shops?
“Quite simply, a proper return policy will lead to more sales. It is all about reducing and even removing any barriers consumers might have when buying online. Web shops that make returns easy and free of charge will see their online sales grow. A good example is Zalando; they have removed all barriers customers might have by offering free delivery and returns. We suggest that web shops should calculate the costs for returns in their retail prices and with that making returns “free” for the online consumer.
Amazon considers returns to be positive, it enables customer loyalty. And Blackberry rather have the customer returning a smart phone directly to them. If that same customer would go into a phone shop to return its Blackberry, he might leave the store with a different brand.
When you look at a recall then it is all about reputation and brand protection. A couple of months ago we did a recall for a manufacturer of hairdryers. Together with our partner we were able to quickly launch a website where customers could check their product code. If the product code matched, the customer received a parcel with shipping instructions to enable the customer to return the faulty hairdryer quickly and without any hassle. As soon as the parcel reached our depot we were then able to send a replacement. No company wants to do a recall but, get it right and it will strengthen both your brand and reputation.”

And what does the future hold?
“Through the rise of Internet companies all of sudden have access to a larger market and subsequently consumers have more choice. We ensure that the order gets delivered from A to B and, if for any reason it does not meet the expectation, goes back from B to A. We aim to make returns as easy as possible through website integration and giving consumers the choice to drop parcels off at the nearest post office, in a drugstore, at the gas station or even at a night shop. Returns Logistics is a growth market and in 2012 we expect a growth of 30%. Our key challenges are further integration of the physical logistics into an IT environment which means we have to keep investing to not only meet but also exceed the market expectations. No matter where consumers are, no matter what reasons they might have to return items, we will continue to ensure that our customers can offer these returns services without having to figure out for themselves how to best arrange this internationally.”