13 Feb How Good360 Can Give Customer Returns a Better Second Life
For retailers, the Christmas shopping rush is inevitably followed by the holiday blues as millions of unwanted and unloved gifts make their way back to stores.
And thanks to the explosive adoption of e-commerce and consumer demand for free return policies, the volume of returns is surging. UPS said this January represented another record-breaking year for holiday returns.
According to estimates by the shipping giant, holiday returns peaked again on January 2, 2020 (traditionally known as National Returns Day) with 1.9 million shipments taking place – a 26% increase from last year’s peak returns day. During the week before Christmas, a staggering 1.6 million packages were returned each day the week of Dec. 16.
Approximately 10% of all goods sold in the U.S. are returned to retailers every year, accounting for roughly $369 billion in lost sales, according to the Appriss Retail and National Retail Federation. The trend is even worse for specific categories, such as expensive shoes and gadgets. According to data from market research firm GlobalWebIndex, the categories with the highest returns are clothing and shoes (56%) followed by electronics (42%) and accessories/watches/jewelry (30%).
All of these returns are putting pressure on retailers to come up with more efficient ways to manage their “reverse logistics,” the industry term for the process of getting unwanted products back from consumers. Retailers are also looking for more sustainable solutions that reduce waste and divert customer returns from eventually going to landfill.
Increasingly, supply chain leaders are considering a flow of goods that is less linear and more circular, one that finds “good homes” for products rather than sending them back to their warehouses. Moving away from the “take-make-waste” model of consumption, this regenerative approach allows retailers to create a circular economy for their goods.
Circular business models aim to reduce unnecessary consumption, cut waste, protect natural resources and serve communities in need. Retailers looking to embrace the circular economy might consider some of these strategies:
Extending product life through corporate donation programs: Instead of trying to get returns back on shelves and having to discount them, companies can simply choose to donate the products. This is where Good360 can be a huge help for enterprises seeking a solution for customer returns that is more efficient, sustainable and impactful.
Each year, we take millions of product returns and identify organizations within our network of more than 90,000 nonprofits that can make good use of these items to serve their communities. Retailers find it easy to work with us because we carefully vet each nonprofit organization for them and ensure that donated goods are properly handled and distributed directly to people in need. This approach benefits everyone — from the companies making the donations to the nonprofits and communities that receive them — and the environment too.
Trade-in and refurbishment programs: Retailers are increasingly exploring ways to collect used products from consumers and giving them a second life by repairing and refurbishing them. Patagonia has been an influential leader in this area with its Worn Wear program, which allows customers to trade in used apparel and gear for store credit. The traded-in products themselves are then refurbished and resold at discounted prices, benefiting both customers and the planet.
Redesigning products to incorporate more recycled materials: By taking advantage of recycled materials from the very beginning of the manufacturing process, many brands are finding that they can reduce their reliance on virgin materials. For example, IKEA is on a mission to be a completely circular business by 2030, by incorporating mostly renewable or recycled materials into all of its products and designing them with circular principles in mind.
Upcycling returned or used products: Sustainably minded companies are also looking for innovative ways to create new products from customer returns or used items that can’t be put back on shelves. Good360 partnered with Wrangler and Cotton Incorporated’s Blue Jeans Go Green program to upcycle post-consumer jeans into sustainable home insulation, which then went into rebuilding more than a hundred homes damaged by Hurricane Harvey.
Companies can follow Wrangler’s lead by thinking creatively about their customer returns. Good360 provides an easy solution for businesses looking for the “best next homes” for returned items. We can help companies be more thoughtful and strategic about their reverse logistics by connecting them with pre-vetted nonprofits that are serving communities in need across the country.
For more information about Good360’s corporate donor programs, visit https://good360.org/corporate/.