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In our latest whitepaper focusing on supply chain innovation, Vogue Business partners once again with GXO to explore the challenges and opportunities presented by reverse logistics. Despite the advancements in technology that promise to maximise consumer convenience and business efficiency, the issue of returns remains an endemic problem for the fashion industry. In the UK alone, returns cost the fashion market at least £7 billion in 2022, generating approximately 750,000 tonnes of CO2 emissions, of which 350,000 tonnes came from reverse logistics processes, the BFC estimates. Within this, transportation is estimated to contribute to half of the total CO2 emissions. In the US, the National Retail Federation puts the value of returns at $743 billion, amounting to 14.6 per cent of all purchases.
For many brands, managing returns is a perpetually loss-making enterprise, but unavoidable given consumer behaviour. What’s more, the process of returns is one that brands must ensure is fast, efficient and satisfactory to the customer, otherwise it risks losing future business from them. Often, goods that are returned are deemed not fit for sale and go into drastic markdown, or worse, landfill. And, with new legislation emerging in the EU, the US and beyond, which seeks to limit waste and environmental damage, brands and retailers are under even more pressure to find sustainable ways to transform their reverse logistics models.
So what strategies can brands implement to not only minimise waste and emissions but also maximise margins? In this new report, we look at how products can be rehabilitated in the warehouse and returned to “grade A” standard, the role of new channels like resale and how the rise in hyper-personalisation can prevent returns happening in the first place. Featuring case studies and examples from brands including Longchamp, Kendra Scott and EveryWatch, the report also looks at the opportunities presented by AI and automation to scale up innovative approaches to reverse logistics.
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