Partnerships bring new services for returns, scheduled delivery.
This week, a pair of longtime leaders in logistics teamed up with tech companies are helping brands and retailers solve some of the trickiest problems in shipping and delivery. Here’s a look at the latest innovation happening in the process that kicks in after the customer taps the buy button:
The partnership: Shipping and mailing company Pitney Bowes is partnering with post-purchase customer experience company Narvar with a focus on improving the process for returns. With the partnership, the companies are launching a joint service that brings together IRL logistics and digital capabilities.
What each side brings: Narvar, which offers a variety of post-purchase features on a platform used by more than 1,200 brands and retailers, is providing capabilities including label-less returns, nationwide home pickup services, fast refunds and store credit processing. Pitney Bowes, meanwhile, will draw from its offerings to provide routing, transportation and processing services. The companies say they are providing a way for brands to “test and automate finding the right balance between convenience and cost in returns, and exchanges.”
The send-back friendly policies of ecommerce generally produce a higher return rate than in-store purchases. The growth of online shopping is leading returns to pile up along with it. The average return rate for retailers jumped from 10.6% in 2020 to 16.1% in 2021, according to a survey from the National Retail Federation and Appriss Retail. Costs are mounting, too. According to a recent Pitney Bowes BOXPoll, omnichannel brands spend an average of 21% of order value on returns. Layer on supply chain challenges and rising transportation costs, and management only gets more difficult.
“Ecommerce brands are in a tough position. The cost reductions necessary among logistics teams today could unintentionally impact the customer experience,” said Gregg Zegras, EVP and president of Pitney Bowes Global Ecommerce, in a statement. “There is tremendous opportunity to create a win-win for brands and consumers by more closely integrating front-end experience technology with transportation networks and operations.”
Why it matters: There’s no easy solution to reducing returns, and the potent mix of inflation and inventory glut is only making it more difficult for retailers. Zara made headlines by charging customers for returns, which brought the downside of taking away a key benefit for shoppers that has become an expectation with ecommerce. As they faced an overstock of inventory that was mismatched with demand due to supply chain delays, larger retailers contemplated paying shoppers to keep their purchases. That comes with an obvious cost to the companies. As leaders seek an answer, it’s worth remembering that the business of reverse logistics doesn’t only happen in customers’ view. This partnership indicates there may be more room for innovation in process, rather than policy.
The partnership: Quiet Platforms, which was acquired by American Eagle Outfitters (AEO) last year, is launching a scheduled delivery service with DHL that will be available to brands and retailers. The “date-definitive” service will be available to 93% of postal codes across Quiet’s network, and can be set up without the need for custom integration. The two companies also plan to develop new delivery services in the future.
What each side brings: Quiet Platforms has been getting plenty of press since AEO made the bold move to enter into logistics with a pair of acquisitions a year ago. While American Eagle does happen to sound like the name of a shipping service, few expected a retailer known for its mall presence to take a big step into logistics. With Quiet and third-party logistics service AirTerra onboard, the apparel retailer is not only building out its own supply chain network, but also growing businesses that offer fulfillment and delivery to others. The company’s tech platform operates on a sharing model that allows it to optimize sortation and planning in an effort to reduce costs. It is used by retailers like Peloton, Steve Madden, Li & Fung and more than 60 others.
With DHL, Quiet can add capacity to its delivery capabilities, and offer a service that allows customers to get specific about when they want an order delivered. It also helps that DHL is a familiar and respected name in an industry where Quiet remains a newer entrant.
“As we continue to onboard new customers and scale the volume of parcels running through our network, DHL eCommerce Solutions will be a key partner in ensuring we are providing the best possible delivery experience to end customers—including scheduled home delivery for the exact day that is most convenient for them.” said Shekar Natarajan, chief supply chain officer of AEO and head of Quiet Platforms, in a statement.Why it matters: Quiet Platforms – and, by extension, AEO – is demonstrating momentum this year for its logistics service. At ShopTalk in April, Natarajan talked about how the company was eager to build partnerships as it grows. It has since teamed with Pitney Bowes, and now DHL – two of the stalwart companies in the space. Standing up an Atlanta fulfillment center in under 60 days further helped. AEO has a bold goal of banding companies together to take on Amazon and Walmart. This year’s moves so far signals it is amassing forces to do so.