Key takeaways on the future of reverse logistics from Manifest Vegas
Samir Kamnani
·February 26, 2024
Several weeks ago, some fellow Loop team members and I had the pleasure of attending Manifest Vegas, a supply chain and logistics industry conference hosted at the Caesar’s Forum.
The conference brought together more than 4,500 attendees from over 50 countries, and served as a summit to showcase the trends and innovations that are transforming the supply chain and logistics industry.
As a returns management solution, we hold a unique space in the conference’s ecosystem: We’re one of only a few companies focused exclusively on reverse logistics, and, as a software company, we move pixels, not parcels.
But in our conversations with supply chain industry peers, they were impressed to learn about our crucial role in optimizing the reverse logistics process and our deep integrations with 3PLs and logistics partners.
How Loop optimizes reverse logistics
Our CEO, Jonathan Poma, took to the stage at Manifest to walk through the problems that haunt the reverse logistics space, and the solutions we’re building to optimize the process for ecommerce merchants.
Here are some key takeaways from his speech, which you can watch below:
- Reverse logistics is an increasingly expensive problem for ecommerce retailers
Poma highlighted the fact that ecommerce returns occur about eight times more frequently than in-store returns – and ecommerce is increasingly growing as a share of retail. Over the last few years, labor costs and reverse logistics are up 50% to 60%, and real estate costs in warehousing are up about a hundred percent. Simply put, reverse logistics costs retailers a lot more money today than it did four or five years ago. - The current reverse logistics process leads to waste, expense, and fraud
More than 2.5 million returns are processed each month, and over 90% of them go directly to the retailer’s warehouse.
“The processing is expensive, incurring unnecessary costs, reducing yield and increasing time to get back to stock,” says Poma. “And then merchants can’t sell those products.”
Adding to the problem, returns fraud and returns abuse is up 300% in the last four years, and most retailers have no simple way to mitigate against the risk of fraud and abuse. “It’s a hundred billion problem in e-commerce today,” Poma adds.
Taken together, these problems lead to high expenses and limited opportunities for resale, hampering brands’ abilities to scale.
- How we’re optimizing the reverse logistics space
Loop has been paying close attention to these problems, and we’ve custom-built solutions that help merchants drive efficiencies and retain more revenue by integrating with 3PLs and logistics partners.
Our new reverse logistics features include:- Item grading and disposition data
By monitoring the quality and condition of returned items, merchants have better insights to make business decisions around their returned inventory.
“We are building essentially an if this, then that,’ setup, where the merchant can set a number of conditions about the item, about the customer, about the order date,” says Poma. “Then, based on a combination of those criteria, you can achieve certain outcomes: you can avoid refunds, you can block the customer from processing another return.”
This approach helps merchants gain better visibility into their reverse supply chain so that they can reduce unnecessary reverse logistics charges, and enhance their awareness of fraudulent and abusive transactions so that they can be prevented in the future.
- Dynamic routing options
Our dynamic routing engine empowers merchants to automatically choose the most cost-efficient and sustainable solution for each returned product.
If it makes economic sense to return an item to inventory, that’s what we’ll do, directing the item to the closest warehouse – but if it’s a more cost-effective solution to refurbish, resell, recycle, or donate the item, Loop will automatically choose the right routing option to limit environmental waste and reduce the cost of the reverse supply chain.
We’re working with our partners to build “a network that is optimized specifically to take items back from merchants, not to fulfill items,” says Poma. - Third-party integration features
While Loop has previously integrated with over 35 unique 3PLs, our new integration with Two Boxes, a returns processing solution that provides granular insights on 3PL returns data, unlocks hidden insights buried in merchants’ reverse logistics data, making it easier to detect fraud, quality defects, and other issues.
“We’re working with Two Boxes and other partners to identify what the future of reverse logistics looks like,” says Poma. ”We’re going to see optimized software to process returns like Two Boxes and some of our early partners working with us to process returns, reduce the cost for merchants and get items back to stock.”
By integrating with 3PL partners, we can pass on valuable returns-related data to our merchant customers – enabling them to process and manage returns more efficiently.
We attended the Manifest conference to network, learn from our logistics industry peers, connect on synergies with prospective partners, and educate the broader logistics community about our solution’s capabilities – and we came away from it armed with new insights, perspectives, and connections that will serve our team well as we continue to build innovative new features.
By collaborating closely with our logistics partners, we’re able to help our merchants reduce waste in the returns process and drive new business efficiencies, while simultaneously delivering an incredible post-purchase customer experience that increases retained revenue and customer loyalty.
The future of returns is already here – and by embracing new technologies, we’re able to help our customers create sustainable brands that will weather any storm in their way.
Want to learn more about how Loop can help your brand optimize reverse logistics?
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