Taming Returns After the Holidays: Reverse Logistics & Automation Strategies

During the months of November and December, retailers face the challenge of meeting increased demand. Given that the average retailer earns up to 30 percent of their annual revenue during the holiday season, this period can truly "make or break" many businesses.

While shoppers are busy making their lists (and checking them twice) throughout the holiday season, it's gift recipients who tend to be active after the Christmas lights come down and the menorahs are put away for the year. Yes, January is return season — and it's just as important for retailers to prepare for this "season" as it is to meet peak demand during the holidays.

Post-holiday returns also tend to pose a significant challenge for many retailers, considering the volume they may receive. Moreover, returns reached nearly $900 billion last year, accounting for 17 percent of total merchandise sales. It's reasonable to expect that this number will increase even more following this holiday season. Furthermore, online purchases have a significantly higher return rate than in-store purchases, largely due to the convenience with which many retailers have made the return process. For this reason, many consumers will purchase multiple sizes of clothes, returning articles that don't fit, or buy multiples of the same product with the intent of returning some of them.

All this being said, it's essential to have efficient reverse logistics in place to manage the increased volume of returns without negatively impacting the overall customer experience. In this post, we'll cover various logistics and automation strategies you should consider implementing in your warehouse or distribution centers to streamline and simplify the overall returns process. Read on to learn more or contact Daifuku for more information today.

The Importance of Optimizing Returns After the Holidays

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Automation drives more than just order fulfillment during the peak holiday shopping months — it can also help retailers effectively manage the post-holiday returns process. The post-holiday season can stress warehouses and disrupt forward flow, potentially impacting on the efficiency of your warehouse and the consumer experience.

Customers expect a seamless return process that allows them to exchange items conveniently or receive a prompt refund. Meanwhile, your return process shouldn't just be streamlined to ensure operational efficiency during the post-holiday spike; you should also collect and analyze data on returns to make any necessary adjustments to curb the number of returns you receive in the future. While some returns are inevitable due to consumer shopping trends and potential product issues, there's always an opportunity to make adjustments to reduce the volume of returns and improve your bottom line.

In the next section, we'll get into some of the specific technologies that can help improve your company's overall returns process, both during the post-holiday rush and at other times of the year.

Automated Technologies to Streamline Returns

Automated solutions are a win-win for both businesses and consumers when it comes to returns. For businesses, such solutions help reduce costs and increase efficiency. For consumers, they help increase speed and add convenience to the return process, meaning their return will be processed more quickly and they'll receive a refund sooner. Here's a closer look at the solutions that help your business optimize the returns process.

Automated material handling systems that typically help improve the returns process include the following:

• AS/RS

• Pouch Sorters

• Unit Sorters

• Robotics

• AMR(s)

Daifuku develops tailored solutions for returns processes and uses a variety of automation technologies which is highly dependent on the products, volume, and variety of the items being processed.  We manufacture much of the equipment but will also work with our equipment providers to implement the best solution.  

Shuttle-based AS/RS

Automated storage and retrieval systems (AS/RS), like tote shuttles, offer significant benefits to your warehouse or distribution center for returns processing for several reasons.  One, they serve as a relatively high-speed, high-density solution for sorting, buffering, and retrieving items. Additionally, they can help any warehouse or distribution center maximize their available storage space, which can be especially beneficial during the post-holiday season when retailers can expect a significant amount of product to return to their spaces.

Daifuku is the original designer of the modern-day AS/RS and the current-day market leader with tens of thousands of successful installations worldwide. From the mini-Load/shuttle AS/RS to the pallet Unit Loads and Sort Transfer Vehicles, we can help ensure these automated solutions work harder for your facility.

Robotics

From palletizing/depalletizing to picking, robots can help your facility meet increased demand and increase productivity, something that can be especially valuable during the busy post-holiday season. Robots offer a variety of benefits for distribution centers and warehouses. Here's a look at how they can help enhance productivity and increase safety:

• Robots can operate 24/7 and don't require breaks. This can help ensure that your robots are operating in your facility around the clock or as frequently as necessary to process returns on demand.

• High accuracy: Return processing can be slowed down when errors occur. Robots have an extremely high level of accuracy, which can streamline processes and result in greater customer satisfaction.

• Safety benefits: Robots can handle mundane tasks that human workers either don't want to perform or are unsafe for them to perform. This can help reduce injuries while reassigning human workers to more value-added activities throughout the facility. A safe workplace is also a more productive one. Studies show that workers who feel valued are more productive and happier overall.

Another nice thing about robotics is that they can integrate with other automated solutions throughout the warehouse and are flexible enough to scale up and down as needed.  One example of this integrated approach is Daifuku’s Sorting Transfer Robot S.

Daifuku has developed a Sorting Transfer Robot S (SORT-S) that will work in conjunction with AS/RS shuttles for piece sortation. This system operates with shuttles which feed totes of returned product via conveyor to induction stations where items are placed onto trays of an AMR cart. The AMR carts then transport and sorts each item to a specified chute. The benefits of this system are that it offers high throughput, it’s space saving, flexible, scalable, and you will achieve high productivity. This type of system Is ideal during peak returns season and flexible to be used for normal picking operations throughout the year

Intralogistics

Just as intralogistics benefits outbound orders, it can also significantly benefit the processing of inbound returns.  Intralogistics is defined as the management, optimization and automation of material within a facility. It focuses on storing, handling and picking goods within a facility, which differs from traditional logistics, or the movement of goods between facilities.

Intralogistics involves setting up dedicated areas where returns can be processed, which can help enhance speed and accuracy. Within this zone, returns can be processed quickly and without error via automated technologies. A good system should also have a robust Returns Management System (RMS) at its core. RMS solutions offer real-time returns tracking, automated data capture and data-driven decision-making.

Contact Daifuku Today

For more information on how to conquer the busy post-holiday return period, contact Daifuku Intralogistics today. As a global leader in designing and manufacturing automated solutions to help your facility work faster and smarter, we have the right tools to help your business better process returns this January. Contact us today to learn more about our range of solutions that can benefit your facility or warehouse.

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