Automation can help with returns crunch

ACCORDING TO recent research by Advanced Supply Chain Group – which surveyed 1,000 consumers and 100 retailers during April – 63% of retailers have experienced an increase in returns during the cost-of-living crisis. The reasons are threefold. First, 57% of consumers said they had traded down (switched to cheaper brands) but this often leads to disappointment, with 43% admitting they had returned the vast majority of the lower-priced alternatives. Secondly, there’s the issue of ‘shopping guilt’, with 60% of consumers saying they had treated themselves to lift their mood but the majority (53%) of them returning the products because they realised they couldn’t afford them. Thirdly, the cost-of-living crisis has caused a spike in dishonest returns, with the majority of retailers surveyed reporting a rise. These three factors are on top of the general trend towards rising mobile commerce, which features more impulse buys and therefore more returns.

These trends have combined to create a ‘returns crunch’ that is squeezing retailer margins further. With the majority of retailers offering free returns, introducing charges seems the obvious solution, yet many brands know that this strategy risks deterring consumers, 65% of whom said they would be less likely to shop with a retailer that charged for returns. The research found 20% of retailers are considering limits on flexible payment options to discourage impulse buys. Meanwhile, 25% of retailers planned to make savings in their supply chains to enable them to continue with free returns. 

This is where warehouse automation can help. Automation can not only reduce costs but also significantly improve accuracy in order fulfilment to minimise returns. It can also facilitate more efficient processing of returns into stock. AMHSA members provide a range of solutions for integrating returns, which do not have to be stored in the same area as the original stock. Overhead pocket sortation systems, for example, can be deployed to handle returns and feed them to the dispatch stations for consolidation with items picked in other areas of the warehouse. 

Leveraging automation to handle returns with the minimum of touches can secure retailers competitive advantage. Some are also investing in AI to help assess the condition of returns. And, of course, automation also helps to mitigate the ongoing problem of labour shortages in the logistics sector.

For more information, visit www.amhsa.co.uk