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Retailers looking for advanced logistics operators

Oct 20

It has been observed for quite a long time that online e-commerce store activities are increasing with each passing day. People since the pandemic (covid-19) have started shifting towards virtual platforms rather than continuing their business on traditional ones. But the fact that should be considered nowadays is that people who are making purchases on an online basis are also making returns simultaneously. 

Due to this worrying situation, the retailers now are seeking to collaborate with advanced logistics operators in order to improve the scalability of their products, as well as minimize the risks related to their supply chains. However, sellers who are doing fba or fbm and have reserved inventory like amazon seller reserved inventory or eBay reserved inventory the use of the right inventory management system can help in improving supply chain management and stock levels. Due to a recent survey by GXO, a logistics operator, the reasons for this need of retailers were found.

Conclusions made by the GXO survey:

It was the most important task carried by a logistic operator that revealed about the products being returned as much as being bought. About 35% of products that are bought through an online platform are returned greatly. This huge percentage has also affected the retailer’s investments. Almost 72% of the retailers are now investing in their return management systems to facilitate the customers and handle these returns well. In addition to this investment, additional space in the warehouses is also being created so that these returns could be received back and stored.

This survey also concluded that;

  • Customers however are shopping online but have also now increased their return volume of products.
  • About 36% of retailers observed that in the past 12 months the ratio of the return has increased to a great level. 
  • In addition to this, 37% of the retailers had a view that their operational costs on their products have risen a lot during this time.
  • It has been also observed that as far as the E-commerce activities are enhancing, it has also given rise to the ratio of the returns.

Furthermore, the National Retail Federation (NRF) also stated that it has been predicted that the return ratio of products will increase up to US $604bn by the end of 2024. Moreover, it was also stated by the President-Europe, GXO, Richard Cawston that: 

“We’re seeing a rapid increase in outsourcing from retailers. They want to de-risk their supply chains. They’re looking for a technologically advanced logistics partner with scale to support their e-commerce growth, including a rising need for returns management that requires specific expertise in technology to optimize inventory.”

In addition to this, the GXO survey also found that in the last 12 months it was asked by the customers about their behavior of buying. Almost 42% of the customers said that they usually return the product bought from an alone platform. Whereas, almost 57% of the customers were of the view that every online platform should have a trusted return system also for their consumers. All these percentages were found by two surveys conducted by GXO and by Statista.

The above-stated estimations about the retailer’s point were taken by 360 individuals representing firms of different sizes in the US, UK, France, and Spain. However, the estimations about customer’s points were observed from 4000 individuals from different areas of the world. Later on, these statistics were looked in by GXO and verified by outside sources as well.