Easy returns can enhance the customer experience
Spencer Kieboom is a man in love with what he does. “Reverse logistics is something I love — it’s so neglected,” he told us. “‘Return free in 90 days’ is a policy, not a solution, and there’s a big difference between the two. It’s just a policy somebody came up with in the hope it would lure more consumers into buying by alleviating the time constraint.”
Kieboom’s mission has been to find a way to make returns easier for consumers and less of a headache for brands. His company’s might be summarized as pick up at porch — but it’s not quite as simple as it sounds.
The reverse supply chain in crisis
In a time when brands and consumers have been consumed with anxiety about what we might call the “forward” supply chain — getting goods from the factory into consumers’ hands — there’s been less discussion about what happens in the reverse direction — the return of unwanted goods. Yet that reverse supply chain has been impacted by events like the pandemic too.
As we’re all aware as individual consumers, COVID vastly accelerated the adoption of direct-to-consumer e-commerce as a favored method of shopping, including for goods people had previously been accustomed to purchasing in person. “When COVID hit, what became very apparent to me within three to six months was that the winners either could adapt very quickly, or at least had the initial framework there, a framework that adds convenience to the consumer,” said Kieboom. “Consumers are going to flip over every stone for convenience, now even more than before. Moving forward, the companies that will be the winners in the next three to five years will be the companies that are looking at their supply chains from a strategic perspective instead of it just being a cost line.”
Easy returns enhance the customer experience, but they solve major problems too for retailers who can have millions of dollars of unpaid inventory waiting to be returned to them. Why the delay? Typically, says Kieboom, customers will wait out most of the free return period before bothering to ship the items back.
Labels, boxes lines
For over seven years, Kieboom was a professional baseball player, and had major league experience as a catcher with the Washington Nationals. He retired early and, it seems, flung himself headlong into his new field. He studied Amazon’s reverse logistics, processes at UPS and FedEx, Dick’s Sporting Goods’ RFID system, Ace Hardware’s “separate POS systems and how they affect inventory management.”
What he discovered was that “there’s a big hole in the reverse supply chain.” He sympathizes with the retailers. “The victim here is the retailer because they’ve been so focused on developing their forward supply chains to consumers to meet their demand that they’ve not met their own demand in doing so. The time of over 30 days it take a consumer to return unwanted goods crushes them. That time is related to labels, boxes and — my least favorite, personally — lines.”
The consumers’ attitude is that they will get around to returning things “eventually” and on their own time. The friction endemic to the return experience disincentivizes consumers. Packing and shipping is inconvenient, but there’s evidence that BORIS (buy online, return in store) is a negative experience too. “Buy online, pick up in store makes a ton of sense,” said Kieboom. When people pick up curbside or in store, he said, over 30% make a purchase in addition to the original online purchase. “BOPIS is here to stay. BORIS has less than a 10% buy rate, converting a new purchase.” Having to bring unwanted goods back to a store is not a great customer experience.
In most cases, it’s not good for most stores either. Online and in-store POS systems just don’t work together, Kieboom explained. Stores carry limited SKUs in comparison to SKUs available online. “You can’t just start selling other SKUs in your store. The next thing you know, they have a locker in the back that gets filled up and eventually gets picked up in a line haul, and that line haul takes it back and they say, just liquidate it, just get rid of it.”
Read next: Supply chain crisis impacts holiday shopping
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Solving through consolidation
Kieboom is the founder and CEO of Pollen Technologies Inc. (not to be confused with Pollen Technologies Ltd., a U.K. banking and payments solution). It’s mission is to help the retailer by removing those inconveniences to the customer that delay returns. The by-product, of course, is an improvement to a much-overlooked part of the customer experience.
“We offer simple scheduling in partnership with retailers,” he explained. The consumer is prompted to pick a date and time on the brand’s website or app. “It’s almost like a PayPal button,” he said. “We control the windows based on parameters of volume and density for that retailer — we’re not going to pick up stuff seven days a week with 1,000 returns in that area, but we’ll pick up stuff two days a week.”
The challenge was to align pick-up costs with the price of a shipping label. Although retailers want to see prompt returns, they won’t pay double or triple the cost of shipping to achieve that. “By doing pick-up at volume, you can get the cost down to $5 or $6 [per item] — that’s possible — but we also control consolidation. That’s what I learned with Amazon’s reverse logistics. With consolidation, which is what our technology does, we’re able to lower the per unit cost on shipping. You don’t need a label, you don’t need a box, we validate the goods on the porch.”
Using Pollen Returns is not mandatory for customers. “If the consumer wants to drop it off, they’re welcome to drop it off; we’re an additional service.” As might be expected, the advantages of density and consolidation imply an urban focus. “Twenty cities’ metro areas make up 70% of e-commerce and our initial focus is on fashion and apparel due to the time constraints from seasons, and fashion trends that lead to waste and dollars lost in the industry.” They’re looking at opportunities in other verticals like telecoms.
“We built technology that works within the existing eco-systems that are out there,” said Kieboom. “We’re not here to offer a new dashboard to somebody — they have enough, and there are companies that are really good at that. We’re here to expedite the return process by minimizing the inconveniences to consumers that make them take on average over 30 days to return unwanted goods. In doing so, you improve inventory returns and minimize waste. It really does bring a more circular supply chain into it.”