Hannah Bravo, Chief Operating Officer at Loop Returns, gives the business case for facilitating sustainable product returns.
In a world increasingly focused on sustainability, brands face heightened scrutiny from consumers, particularly Gen Z, who prioritise ethical and eco-conscious practices.
According to a recent sustainability study from Deloitte, 34% of UK consumers expressed that their trust in brands would be bolstered if they were recognised as ethical or sustainable providers.
Delving deeper into generational purchasing habits, a further study found that 62% of Gen Z shoppers prefer to buy from sustainable brands, with a staggering 73% willing to pay more for sustainable products.
While many online retailers are embracing eco-friendly production and sales practices, the post-purchase process poses a significant challenge to sustainability efforts.
Between 15% and 40% of purchases made online are returned, and retailers dispose of or liquidate an estimated 40% of those returns, resulting in a staggering five billion pounds of waste annually.
It’s evident that brands must mitigate the environmental impact of their return processes to achieve sustainability goals and align with the values of younger consumers, fostering long-term loyalty.
The environmental toll of unsustainable return practices
On average, each returned parcel costs a UK retailer £20, approximately 10% of their supply chain costs.
However, the pressures created by a busy and essential returns landscape extend beyond mere financial implications, impacting both the environment and the fiscal well-being of retailers.
The process of reverse supply chain management is an intricate one. It demands additional transportation and packaging, inevitably contributing to heightened emissions and waste.
This itself has a knock-on effect and today retailers find themselves burdened with the growing costs of labour and other expenses inherent in handling returns, where they often lack streamlined methods for efficiently processing returned goods. It’s a delicate balance and one that has to be continually managed and monitored.
In a recent international poll conducted by Loop, over half of consumers (56%) expressed concern about the environmental impact of returns, with more than a third (35%) refraining from returning unwanted items due to environmental considerations.
These figures are poised to escalate as younger consumers advocate for sustainable retail practices.
Fostering sustainability in return practices
Fostering sustainability in the returns process has moved far beyond just a moral obligation to the retail sector today but instead a strategic move that delivers customer acquisition and loyalty.
To achieve this goal, there are some simple methods that not only improve sustainability but also forge deeper connections with the environmentally driven shopper:
Assist customers in finding the right product initially
Minimise returns by facilitating informed purchasing decisions and utilise high-quality images and detailed product descriptions to provide customers with a comprehensive understanding of products before purchase.
Offer alternatives to returns
Encourage exchanges rather than returns, reduce costs and environmental impact, and utilise automated returns management solutions to personalise exchange options based on customer feedback.
Allow customers to keep items when returns are not cost-effective
Refund purchases without requiring returns for items deemed uneconomical to process and leverage retail platforms to analyse return requests and determine the viability of accepting returns.
Collaborate with external partners
Partner with reverse logistics companies and resale partners to streamline return processes and maximise value from returned items, and leverage their expertise to reduce waste and lower environmental impact.
In conclusion
As the number of environmentally conscious consumers continues to rise, sustainability is poised to become a key point of difference for brands.
By embracing sustainable return initiatives, brands can meet the evolving expectations of Gen Z and other environmentally conscious demographics, while simultaneously benefiting the environment and their bottom line.
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