Leveraging Technology for Retail Efficiency During the Holiday Returns Influx

Retail job openings reached a staggering 1.3 million in August — the same month employees voluntarily left their jobs at record rates (4.3 million). As the 2021 holiday season approached, retailers scrambled to fill hundreds of thousands of vacant roles by offering higher wages and signing bonuses. However, while they made it through the holiday shopping craze, retailers must brace for the largest returns season of the year. Faced with continued employment deficits and drop-out rates, along with ongoing shipping and logistics woes, it will be a challenge for sure. Some issues are unavoidable, but retailers that utilize technology to make their existing staff and processes more efficient can minimize the fallout.

How Retailers Can Prepare for the Surge of Holiday Returns

Consumers spent $33.9 billion during Cyber Week alone, and while in-store shopping on Black Friday was down from pre-pandemic levels, foot traffic rose by 47.5 percent compared to 2020. Massive in-store and online sales added layers of supply chain complexity to consumers getting their orders on time. That same demand will translate to billions of dollars in post-holiday returns and continued supply chain strain amplified by employee deficits. Fortunately, retailers can implement returns management technology to avoid returns processing delays and resell those unwanted items as quickly as possible.

Returns Management Technology Gap

The problem is most retailers don't have integrated disposition software or a system to help them determine the most efficient and profitable returns processing path by factoring in millions of UPC data points, market demand, and costs. For in-store returns, retailers instead lean on disparate systems with outdated data, manual procedures that rely on spreadsheets, and error-prone human decision making to determine where to send items. For online returns, retailers typically rely on an inefficient reverse supply chain that routes items to multiple sites before reaching a returns center, wasting transportation dollars and releasing toxic emissions along the way.

In some cases, retailers spend more than 21 days processing and shipping a return before sending it back to a shelf, back to the vendor, or through a liquidation channel. Considering that products lose value every day they’re not sold, this lengthy back-to-market duration isn't sustainable. That’s why retailers must automate the process to reduce staffing reliance and improve efficiency in the process.

The Reverse Technology Solution

The easiest way to do that is to empower store associates and warehouse workers with the right reverse logistics software that intelligently automates product allocation for point-of-sale (POS) systems and e-commerce marketplaces. A sound reverse logistics strategy should consider data from sources such as a retailer’s catalog and contracts between the vendor and retailer to produce a disposition based on the most economical path for each item.

Reverse disposition software creates efficiencies by enabling workers to scan returns when they arrive at the store or returns center and immediately determine the most profitable path. Through prescriptive analytics software that integrates POS and inventory management systems, workers can find and fix inefficiencies they might not have noticed otherwise.

An integrated system can reduce returns processing time from 21 days to less than a week. In looking at our own data, the simple act of scanning a return into our software could reduce staffing needs by a third, reduce errors by 10 percent, and make every employee’s job easier.

Overcoming Staffing Shortages

Technology can help retailers maximize staffing requirements; however, they will still need more people to manage the sheer volume of items during the holiday returns season. That’s why retailers need to do more with less, optimizing every person’s role and eliminating manual processes wherever possible. Retailers that take a systematic approach through e-reverse technology and focus on making their teammates productive and happy will minimize waste and recover more profits.

Sender Shamiss is the CEO of goTRG, the world's first turnkey reverse logistics company.