3 Trends Upending the Returns-to-Landfill Pipeline This Holiday Shopping Season

Ever-increasing scrutiny of brands' sustainability practices and a more challenging economic environment are prompting brands to find better solutions for one of the biggest problems in online shopping: returns. And with the holiday season in full swing, retailers are gearing up for the busiest returns season of the year. By streamlining logistics through third-party partners, leveraging secondhand markets and designing for repairability, brands are finding overlaps between sustainable practices and cost recovery. "When [businesses] receive a returned product, they have a lot of options—the easiest one is trashing it," explained Olivia Montgomery, associate principal analyst at Gartner-owned market research firm Software Advice. But based on a new survey of small and medium-sized businesses focused on reverse logistics, Software Advice found that retailers prioritizing sustainability in their returns management strategy are seeing "increases in customer satisfaction," she said. "A lot of them are able to recoup the majority of the cost of a returned item." Wary of Rising Plastic Concerns, More Brands Are Turning to Compostable Disposables In 2022, Americans returned roughly $816 billion worth of stuff, according to the National Retail Federation. Over the last several years, ecommerce has transformed the landscape of returns, making it more common for people to order multiple items up front, intending to only keep the one that works best. As inflation and interest rate hikes squeeze retailers, that's become more of a problem, prompting changes that not only put a few more dollars in the pockets of businesses but also prevent returned items from ending up in landfills. Less packaging, less carbon, less friction Reverse logistics company Happy Returns, now owned by UPS, aims to make returning online purchases way less annoying for the buyer and simpler for the online retailer. By serving as the logistical connection between a network of drop-off locations, the seller and the buyer, Happy Returns lets people return a product without having to repackage it, print a shipping label or get to a post office during business hours. Recently, the company started using reusable totes to take items to and from its warehouses, eliminating the need for single-use boxes and multiple packages—saving on both materials and shipping emissions. "We [were] doing all of this shipping from the drop-off points to the hubs," said David Sobie, co-founder and CEO of Happy Returns. "Instead of shipping in cardboard, why don't we ship in a reusable tote and eliminate cardboard from the equation?" Finding resale opportunities For retailers, triage is one of the most crucial parts of handling returns. Once returns are received, either thanks to logistics partners like Happy Returns or sent directly from the consumer, the company has to figure out what to do with each item. The best case scenario is that it goes back on the shelf to be resold as new—but that's not very common, Montgomery explained. The next-best option is that it gets resold at a discount, either through the brand's platform or a third-party platform, which is becoming more common for small and medium-sized businesses, according to Software Advice's report. Less Than 1% of Clothing Is Made Into New Garments. These Brands Want to Change That "More and more retailers and brands that we work with are embracing recommerce," said Marcus Shen, CEO of B2B recommerce platform B-Stock. "While throwing it in the landfill might be easier, the right thing is to resell it and make sure that this stuff gets to good use." By recycling, repackaging, repairing or refurbishing products, 35% of survey respondents told Software Advice that they were able to recoup over half the cost of returned items. Designing for repairability Gathering data around returns throughout the triage and repair process also lets brands address the reasons that items are getting sent back in the first place, whether that's a design issue or just bad packaging. But even if the brand can't refurbish or repair products in-house, many B2B platforms like B-Stock can help get those broken items into the hands of folks who can do the fixes. America's Remanufacturing Company, which works directly with major retailers like Amazon, specializes in repairing, repackaging and reselling products that have been returned. Half of those surveyed told Software Advice that they're using reverse logistics data to make changes to product design. Improving repairability could make those products more valuable on secondhand markets.

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