Retail Returns handling Best Practices from L.L. Bean |
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Written by Paul Rupnow
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Monday, 09 March 2009 |
Some excellent Reverse Logistics benchmarks and best practices from L.L. Bean for e-commerce retail returns handling and processing from an article by Amanda Loudin from Inbound Logistics.com, DC Solutions.
"Bean There, Returned That", InboundLogistics.com, DC Solutions, July, 2007 by Amanda Loudin
"L.L. Bean shipped 48 million units last year, of which six million were returned"
Note from Paul Rupnow - That translates to a 12.5% return rate for an e-commerce and catalog retailer for 2006.
"During
the holiday season, the returns department braces for an 18-fold
increase in volume. On its busiest day last year, the department
processed 47,000 individual returns."
"The
facility, which measures 135,000 square feet, houses a staff of 500
processors who handle customer returns and exchanges. About 85 percent
of returned items include a refund request, while 15 percent require an
exchange. Returns services also include repairs."
"Today, 80 percent of returns can be processed with one touch to reduce re-handling, a big change from the old days."
Employees who formerly processed 16.5 units per
hour now handle 18 per hour, a number that Steele expects will increase
during peak season.
Note from Paul Rupnow - L.L. Bean utilizes one staff person to process the entire return. 18 per hour is just over 3 minutes per return.
Cost
savings have been high as well -- the simple act of shaving seconds off
processing each return leads to hundreds of thousands of dollars in
labor savings. By eliminating two handoffs, the company also has
improved merchandise operations and maintained "first in, first out"
returns processing.
In addition, L.L. Bean
is pleased with the ROI it expects from the new technology. While it
costs about $14 million annually to run the returns department, the
company considers it money well spent because keeping customers happy
pays off in spades.
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