TAKEAWAYS
While consumers gear up for holiday purchases, retailers are already prepping for the onslaught of expected returns. Top of mind for retailers wishing to optimize holiday-driven reverse logistics are topics such as the rise of returns fraud, the role of AI in mitigating returns, inventory management strategies, and shifting returns policies , among others. A recent survey of U.S. retailers, conducted by returns management solutions provider goTRG, shows that retailers are more focused than ever on addressing the ongoing challenge of returns. ( See their top priorities below. ) With holiday retail sales predicted to increase between 2.3% and 3.3% in 2024 according to Deloitte’s annual holiday retail forecast, the focus on returns is apt. The backdrop of significant economic and political uncertainties surrounding this year’s peak season also influences how retailers plan and execute their holiday strategies. Here are some of their top concerns and focus points, according to the report: • 63% of retailers categorize returns as a severe or significant problem. • 60% of retailers raised prices in the past 12 months to offset the growing costs associated with returns. • 47.4% of retailers are already utilizing AI to minimize return rates by offering more detailed product descriptions and sizing information, thus improving purchasing confidence. • 52.4% of retailers indicate that returns fraud worsens during the holiday season. • In 2023, return fraud ballooned into a $101-billion issue, affecting 13.7% of all returns, according to NRF. To combat these challenges, 52% of retailers are implementing one or more preventative measures. • Respondents indicate the top three forms of returns fraud are the return of used, non-defective merchandise (17%), the return of merchandise purchased with stolen or otherwise illicit payment methods (16%), and the return of shoplifted or stolen goods (14%). READY, SET… RETURN
Building more resilient, adaptable operations to handle future disruptions is rapidly becoming a top priority for supply chain leaders. What are the key elements needed to build such resilience? Investing in risk management strategies, advanced technologies, and external partnerships to stabilize operations were among the responses from 300 industry decisionmakers recently surveyed by R.R. Donnelley & Sons Company (RRD). In its Future-Ready Supply Chain Report , supply chain leaders indicate that they plan to make substantial adjustments within the next two years to boost their operations to respond to supply chain disruptions. When it comes to risk management, their priorities include: • Forming relationships with alternative suppliers (69%). • Increasing reliance on domestic suppliers (67%). • Frequently updating risk assessments to adapt quickly (50%). Respondents are also investing in technology tools such as real-time visibility, IoT, and predictive analytics to boost resilience. They also cite strategies such as: • Using AI for supply forecasting (59%). • Using AI for visibility and operations (56%). • Adopting advanced order management systems for agile fulfillment (60%). Sustainability also plays a role in future planning; top priorities include sustainable logistics and sourcing. And 63% of companies expect to increase outsourcing over the next two years, primarily for speed and scalability. FUTURE-READY SUPPLY CHAINS
Source: goTRG
November 2024 • Inbound Logistics 19
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