1) The Burden of eCommerce Product Returns
The rapid rise in eCommerce businesses is due to the free shipping and returns service most offer. While acting as a bait to reel in customers, free product returns also trap businesses. They lure them in with the potential of customer acquisition and retention.
This is a time when more than 80% of shoppers check return policies before placing an order. But eCommerce stores can experience returns of 3 of the five orders they ship out.
Shopping via eCommerce stores removes the necessity of designing a flawless physical shopping experience. This is an important feature of online businesses. But almost 40% of shoppers declared that easy returns were the most crucial feature of online shopping.
Free shipping and returns are a vital and integral component of online shopping. But the environmental impact of eCommerce returns is massive and undeniable.
2) The Impact of eCommerce Returns on the Environment
Over 90% of shoppers choose to believe that their returns are stocked immediately. In truth, nearly 25% of shipments are unsuited for restocking and head for the landfill. In comparison, the other 75% are subjected to a rigorous and extensive scanning process. The time taken almost always condemns a returned product to the discount pile.
With the way retail businesses function now, it makes more monetary sense for eCommerce stores to dispose of their returns. This is often more cost-effective than opting for secondary sales markets or recycling.
2.1) Transport & Logistics
Logistics operations involved in the returns process are responsible for millions of metric tons of carbon dioxide emissions. Whether a returned shipment travels by land, air, or sea, every package will leave emissions behind in its trail. eCommerce leaders like Amazon are introducing electric fleets. However, the returns rate keeps growing, negating any good these steps can do.
Some third-party logistics carriers aggregate and consolidate eCommerce returns and help cut down the cost of return and the rate of pollution. Eco-conscious online retailers have begun to incorporate environmentally friendly shipping that focuses on limiting the carbon footprint.
eCommerce product returns can end up in landfills. The cost, time, and resources spent on the chemical, material, water, and power in manufacturing them go to waste. Some materials can take two centuries to decompose completely. When decomposing, they release noxious gases leaking toxic contaminants into the air, soil, and groundwater.
Clothing brands lead the numbers in eCommerce returns. So it only makes sense that they lead the drive to protect the environment. Many brands have started initiatives to cut down on returns waste.
Fashion brands like H&M and Patagonia have arrested textile waste growth by setting up recycling services and resale sites. Nordstrom sell their returned and damaged merchandise in their second-hand store.
The Renewal Workshop are experts in supply chain management. They help well-known brands renew and restore their returned items. They have diverted close to 80,000 pounds of fabric waste from dumps in three years with their circular solution.
2.3) Packaging Waste
Shipped products contain a wide range of packaging materials. This includes anything from plastic to cardboard and fabric, all of which end up as waste that contributes to landfills.
Most eCommerce businesses choose to stock standard box sizes that fit multiple products. This helps them manage their inventory stock and supply requests better. However, sometimes a container that fits a laptop may be used to pack a mobile phone.
It takes additional packaging materials such as styrofoam and air cushions, to fill in the space. This increases the cost of material and waste per product. It also occupies more space than necessary in the van, This is precious space that the delivery partner could use to transport two more products.
Conscious eCommerce businesses have moved to more expensive compostable, biodegradable or reusable packaging materials for returns. Some retailers also reuse packaging from their return shipments for new orders in order to reduce packaging waste.
Return rates average of 30% and only close to 10% are viable for resales at full price. As a result, eCommerce retailers have pumped up their stock to regain losses. They increase production through the mirage of demand. In this manner, eCommerce returns double the impact on the environment through overproduction.
The higher the production quantity, the more significant the increase in return rates. This leads to a heavier toll on the environment, and this toxic cycle keeps turning.
3) How can you reduce the impact your eCommerce Returns have on the environment
As ecommerce grows, the number of returns that companies process increases. This can have a negative impact on the environment, as returns often require transportation and disposal. Here are some tips to help reduce the environmental impact of your eCommerce returns.
3.1) Harness the power of artificial intelligence
AI has come a long way in the recent past. Things we saw in sci-fi movies just a couple of decades ago are well on their way toward reality. In eCommerce returns, AI plays a vital role across three processes that sustainability necessitates.
The processing of material sorting and composition analysis is essential for any business that relies on the quality of its recycled goods. However, this process can often be time-consuming and inconsistent. This is where AI-based waste recognition systems come into play and help you save time and money.
Image classification removes the possibility of inconsistencies in these operations. By identifying and categorizing your waste materials, you can optimize the quality of the goods you recycle.
Two things to keep in mind while designing products are waste reduction and sustainability. You can use AI to help you identify and use the raw materials needed for production. This ensures that goods can be re-manufactured using recycled components and materials.
You can also minimize manufacturing waste by using AI, which will help reduce the environmental impact. You will also be able to create products that fulfill your goal of sustainability. In this manner, your products will be perfect for a circular economy strategy.
You can also use AI in rerouting products and eCommerce returns. Automating your operations will improve your decision-making, increase processing speed and reduce returns incurred expenses.
Machine learning helps you identify customer behavior patterns by analyzing data. You can use this information to predict the likelihood of certain product types experiencing higher returns. And you can utilize it to plan your inventory or shipping to correct any faults in these operations.
Analyzing data and improving your strategies and operations will help you reduce the cost of returns and improve customer satisfaction.
3.2) Implement automation in your processes
Automation helps convert reverse logistics from a money drain into a profitable operation. By making returns easier, automated returns processes enable eCommerce retailers to cut down on labor and time expenses. The data from returns also allows businesses to run analytics and ascertain the best customer experience and products.
There is a broad scope for the implementation of automation in eCommerce returns. All approaches have their benefits and can be implemented to power up the weak links in any business’s returns management.
Returns software in reverse logistics automates returns processes by limiting manual intervention and errors. Operational software minimize costs, improve efficiency, and use analytics to improve profitability. Post-purchase customer experience software emphasizes the returns portal itself and focuses less on back-end processes and more on customer experience.
Returns apps reduce the necessity for communication with the customer service team and improve the user interface. Returns solutions incorporate a portal that can be used to process, monitor, and optimize the store’s returns processes.
3.3) Partner with shipping aggregators
By partnering with a shipping aggregator, you can reduce your eCommerce Returns’ impact on the environment. By consolidating your shipments, you can reduce the number of trucks on the road and the amount of fuel being consumed.
Shipping aggregators can also help you to recycle packaging materials and reuse boxes. In addition, they can provide you with tracking information so that you can see where your products are at all times.
3.4) Shipping partners
One way to immediately start reducing your company's environmental impact is by partnering with a conscious shipping company. There are many that use recycled materials for packaging and ships products using alternative fuels.
Another way to reduce your company's environmental impact is by choosing a shipping partner that offers carbon-offset shipping options. Carbon offset shipping allows you to offset the emissions generated by your shipments by investing in projects that reduce emissions elsewhere.
By taking these simple steps, you can make a big difference in reducing the environmental impact of your eCommerce business.
3.4) Secondary Markets
Many businesses are turning to online marketplaces or shipping companies specializing in reverse logistics to help market and sell returned products in bulk. While recouping the saveable cost from returns, this strategy ensures that lesser merchandise makes it to the landfill.
In the next five years, sales in the secondhand market are estimated to hit close to 80 billion dollars, with the resale trend being led by the Gen Z. With almost 50% of online shoppers picking up resale products, this sustainable initiative helps drive engagement while reducing waste.
4) How can ClickPost help you reduce the impact your eCommerce Returns have on the environment?Using ClickPost’s software for returns management will help you reduce your returned products’s impact on the environment in a few different ways.
As an AI-driven software, it can be utilized to cover several workflows across different departments. Some of these include customer service and logistics. Since all data generated and transmitted will be electronic, you will use lesser paper through the process of managing returns. And by going almost paperless, your business will reduce its carbon footprint, which is beneficial for the environment.
Most goods that are inspected at your warehouse will be segregated into restocking and disposal piles. This is because the cost of sending your goods out for repair will add on to the cost that you need to recoup. This makes it challenging to make a profit from the returned product. And all the products that land in the disposal pile will head to toxic landfills.
But you can easily lower the amount of rejects that head to the dump. Consider partnering with a shipping company that also provides quality check or inspection services. Using ClickPost, you can then assign rules wherein goods that can be refurbished or recycled or broken down into spare parts can be sent directly to your service centers.
By sending returned products from the customer to the service center, you will make a financially sound decision that also helps the environment. In this manner, you can also partner up with liquidators or resellers in various territories.
They will do the repackaging and selling for you and take a small percentage for their service. These strategies will help you cut down on fuel usage and vehicular emissions.
Another great way to be as eco-friendly as possible is to partner up with shippers who focus on green initiatives. This could include everything from packaging, transportation and even aggregated shipping. Using ClickPost, you can assign shippers to routes where they have special eco-friendly services and track all of them on a single portal.
These working tricks are easy to implement when you integrate with ClickPost. An extremely versatile tool for businesses, it provides visibility no matter how many supply chain solutions providers you partner with.
With this unlimited potential to do good, all that remains is finding the right associates for your business. Especially if you are looking to reduce the impact your eCommerce returns have on the environment.
So, what can businesses do to reduce the environmental impact of product returns? There are a few things. For one, they can automate the process as much as possible. Returns often require a lot of human interaction and manual labor- something that machines are perfect for handling.
Additionally, businesses should consider partnering with other companies who share their commitment to sustainability. By working together, businesses can create a system where products are returned in an environmentally friendly way, and the planet is spared from unnecessary damage.
It also means being proactive about customer service, providing clear return policies, and easy-to-use return processes. And finally, it’s essential to think about how you can reuse or recycle returned products in an environmentally friendly way.
1) What happens to products that get returned?
eCommerce products that are returned are often trashed as it is a cheaper option than the steps that entail potential reselling.
2) Are returns bad for the environment?
With logistics processes and the returned goods affecting the environment, eCommerce returns are a leading cause of pollution. Reverse logistics double the carbon emissions that occur in forward logistics. Only half of all returned products get recycled, and nearly 5 billion pounds of merchandise end up in the dump yearly.