A recent report released by Allied Market Research is raising a lot of eyebrows in the reverse logistics industry. The report concluded that the global reverse logistics market could reach $603+ billion in just 5 years. That is a compound annual growth rate (CAGR) of 4.6 percent from 2017. What is fueling this exponential growth and how can retailers and manufacturers get ahead of returns in what seems to be a returns consumer culture?
Determining factors of the estimated reverse logistics growth
The reverse logistics market study by Allied Market Research has outlined a number of key factors why the reverse logistics market is set to rise. One such factor is the growth of ecommrce. The ecommerce industry has an estimated growth of $1.4 billion from 2019 to 2021.
If that trend continues, the total of global online retail sales will more than double. And ecommerce is not the only catalyst for the expansion of the reverse logistics market over the next 5 years. There will be new markets popping up in multiple industries as the need for reverse logistics becomes a top priority, like in the case of the pharmaceutical industry.
The other factors outlined by Allied Market Research include . . .
- Increasing government regulations in the automotive industry
- Blockchain technology implementation
- Global e-waste needs
- Increase in quality control
- Overall issues in the actual reverse logistics model
Synergizing the reverse logistics process with retailer and manufacturer needs
The increase in competition for online consumers has caused some serious issues for retailers and manufacturers on the back-end. Ecommerce is tailoring the online shopping experience for customers and knocking down all barriers when it comes to raising the confidence to buy levels.
Convenience like easy returns, refunds, and try before you buy has put serious pressure on the returns management process for retailers and the manufacturers they serve. In fact, up to 30 percent of products purchased online are returned. And the overall value of returns made in 2018 was in excess of $369 billion. That’s a lot of money left on the table for retailers and manufacturers.
A more relaxed ecommerce shopping experience is not the only issue. In-store purchases and returns are also on the rise. This is a clear indicator that retailers and manufacturers need to implement a sustainable reverse logistics model to increase recovery and sell-through on returned products.
Enter business solutions and SaaS for multi-channel sales and supply chain
Retailers and manufacturers no longer need to accept the loss on returns, and the cumbersome logistics needed to handle and move those returns from store to returns center. In the past, returns were considered waste and normally ended up in landfills or awaiting a disposition decision, like refurbish, liquidate, or recycle, losing seasonal value as the clock works against getting the most value on a return.
What’s the solution? A fully managed, end-to-end reverse logistics process that is powered by machine learning and data science. Technology like goTRG 9040 AI Disposition Engine and R1 Cloud is changing the reverse logistics process for top global retailers and manufacturers. Now recovery is happening at an unprecedented pace throughout the reverse supply chain.
Is your company’s reverse logistics streamlined for maximum recovery and sell-through?
Manufacturers and retailers are recovering more using our technology solutions. The ease of integration of this technology is also enticing for retailers and manufacturers. In a week your company can be onboarded, making the best disposition decisions on returns further upstream than ever before.