On Aligning Returns Management with the Ecommerce Strategy to Increase Effectiveness

Abstract: The returns management (RM) process has traditionally been seen as a value recoveryprocess, which has resulted in an efficiency focus in the returns flow. This thesispresent, the effects on a fashion e-commerce organisation, which is underprioritising orneglecting RM in general and consumer returns specifically. In the reported anddescribed single-case study and through a real-life experiment, performed with thecase organisation nelly.com, it is shown that the consumer returns rates are not onlyinfluenced by the product itself. They represent a complex problem that has its reasonsand causes, whereby the product (size, fit, quality, et cetera) together with consumerbuying and returning behaviour ultimately have a combined effect on the organisation.The results from the thesis are based on previous research and rest heavily on theresearch performed since the start of the research journey. Consumer returns formpart of the value creation in e-commerce and therefore returns management is astrategic part of the business as such.Handling consumer returns in a traditional or efficient returns system without knowingthe reason for return and the state of the returned item is nothing other than gamblingwith resources. The proposed returns information system (RIS) framework in thethesis addresses this issue and facilitates the downstream application of thegatekeeping activity, near or at the end-user location; managerial attention is requiredat the strategic process level to build a proper returns system that is partly, and quitelikely, decentralised.Products, suppliers, customers and internal processes cause consumer returns andtherefore a returns manager needs to address these with other functions and SCpartners. This result is partly new and the proposed alignment of RM as a strategicprocess is new in the sense that RM is part of value creation. This thesis empiricallysupports the conclusion that “one size fits all” is outdated and does not fit with ecommercebusiness. The results imply that managers need to gain a profoundunderstanding of consumers’ buying behaviour and also to create differentiateddelivery and returns processes to be able to grow within the existing customersegments and possibly to attract new or non-customers who are out of reach at present.Seeing the RM process as strategic in e-commerce, as proposed in the thesis, facilitatesthe development of the process to become both effective and efficient. Returnsmanagement has the potential for revenue creation and cost reduction.