Among the usual terms sprinkled into discussions of a supply chain industry in flux on the first day of Home Delivery World in Philadelphia, Aug. 31 — including partnerships, forecasting and excess inventory — ideas about how to more efficiently “re-commerce” returned goods into the supply chain seemed the most fresh and fruitful.
By now everyone in the business is well aware that the huge pandemic-driven boost in e-commerce has brought with it a painful counterpoint: massively increased returns. Online sales accounted for roughly 23% of the $4.583 trillion of total U.S. retail sales in 2021, according to National Retail Federation, and 16.6% of that got returned — a jump from an average return rate of 10.6% in 2020.
It doesn’t help that so many goods sold in the U.S. originate with sellers in China, even if that fact is invisible to the consumer because they’re buying through third parties such as Amazon or Etsy. “Returns to China are very costly,” said Brian Bourke, Chief Growth Officer at SEKO Logistics at a keynote presentation, “The Future of Last-Mile Delivery.”
Bourke pointed to companies such as FloorFound that are tackling the particularly tricky problem of returns of big and bulky items such as furniture. If these can be processed for “re-commerce” by identifying opportunities to sell and deliver returned items more locally, the benefits include saving money, cutting waste and increasing sustainability.
Re-commercing is set to grow in importance as retailers in the U.S. and other major markets face the unpalatable fact that they over-estimated demand for multiple product lines such as appliances and home-improvement supplies, and are stuck with a giant glut of inventory.