Retail supply chain software for enhanced supply chain efficiency, encompassing warehouse & transportation solutions, inventory control, and strategic/planning modules.

The Logistics of ‘Take-Back Tuesday’ and Post-Christmas Returns

The Logistics of ‘Take-Back Tuesday’ and Post-Christmas Returns
Coined ‘Take Back Tuesday’, the third of January 2017 was officially the busiest day for online postal returns following the Christmas period. To put it in perspective: post-Christmas, sources predicted a 50% spike in the volume of parcels being returned during Take-Back Tuesday over the normal average for the rest of the year. In an increasingly consumer-driven marketplace, what exactly are the implications of such an influx of returns following the biggest shopping season of the year? Howard Rosenberg, CEO of B-Stock Solutions, explores how retailers can best manage the returns following the festive period particularly regarding stock that can’t be returned to the shelf.

In order to remain competitive, many retailers are relaxing their return policies and putting a greater focus on driving customer loyalty. The ‘try before you buy’ culture is now commonplace, with consumers benefiting from buying an array of products and having the option to return these goods with no questions asked. While this approach may be highly attractive for consumers, it can substantially add up for the retailer. Hundreds of billions of pounds of merchandise is returned to retailers each year, most of which can no longer go back onto the shelves. No matter what the reason is for the return, this is a significant amount of idle inventory decreasing in value each day and/or taking up valuable space in the warehouse.

Given how intensely competitive the modern retailing environment is, minimising the losses on returned stock should be a major priority. Reducing internal costs in the reverse-logistics handling of returned merchandise and maximising the recovery on the stock slated for liquidation is critical. By looking beyond traditional liquidation methods, retailers can create a more sophisticated, scalable solution that optimises cash into the business from customer returns.

So, once merchandise has been slated for liquidation, what are the best practices to implement in order to achieve maximum efficiency? The following are four key elements that retailers must consider:

Automate the Process
A web-based auction solution makes it easier to have thousands of buyers compete for inventory than it is to negotiate prices with individual buyers. What’s more, operating your own liquidation marketplace means building your own strategic asset that will benefit you for years to come. A marketplace is a strategic asset not only for the liquidity it provides, but also for the pricing and market intelligence you get from knowing what buyers are willing to pay.

Target the Right Buyers
A greater number of buyers results in increased competition and higher prices, but having the “right buyers” can increase prices threefold. Consider segmenting buyers by product category, condition code and ability to participate.

Take Control

By selling to a liquidator, you lose control of downstream sales since there is little immediate action you are able to take against your one or two buyers without jeopardising your business. Retaining control over who is able to buy your excess inventory and how your brand enters the secondary market is therefore a must.

Create a Direct Channel to Numerous Buyers
While returned and excess inventory might have little value inside your company, the potential value to secondary market buyers can be substantial. Selling directly to business buyers who compete for your inventory will help drive liquidation prices up versus having a single buyer driving them down.

As retailers battle to process the surge in returns following Take-Back-Tuesday and the weeks after Christmas, assessing their reverse logistics and liquidation plan(s) for customer returns and excess inventory is a must. In today’s retail environment, those few critical points of margin can mean the difference between winning and losing this holiday season and all year long.