Online sales have seen incredible growth over the past five years. According to the U.S. Census Bureau, e-commerce sales were at $19.8 billion for the first quarter of 2005, up nearly 400% from the first quarter of 2000 and 25% from Q1 2004. If this trend continues, e-commerce sales will double again within the next four years. With this Internet growth, businesses and the transportation industry have been redefining logistics. Shipping has evolved to forward movement and returns, better serving the needs of the customers. And the United States Postal Service recognized the shift and responded.
First, the Postal Service introduced Parcel Select, a service designed for shippers looking for an economical and reliable ground delivery service. Parcel Select offers discounts to commercial shippers who enter their packages into the Postal Service network closer to the ultimate destination.
For those shippers who do not have the volume or sorting capabilities to take advantage of this service, the U.S. Postal Service partners with parcel consolidators to offer savings to shippers who ship as little as 100 packages per day. Some consolidators offer a full range of shipping services, including pickup, delivery, reporting, tracking, tracing and inventory management. By leveraging the package volume from multiple merchants, consolidators can better take advantage of the Parcel Select postage discounts and pass them along to the companies that would otherwise not qualify for them. The Postal Service benefits from reduced labor and operating costs.
The Postal Service is answering the call once again with the introduction of its Parcel Returns Service, which offers merchants a cost-effective way to retrieve merchandise consumers choose to return. The program works by using a pre-addressed, postage paid return address label that shippers can include inside a consumer's package.
Should the consumer decide to return a package, he just needs to attach the label to the box and give the package to his postal carrier or enter it into the mail stream. The data on the label routes the package to the local post office or closest bulk mail center, where the parcel consolidator partner then picks up the package. The merchandise is then shipped back to the merchant and re-inventoried. The merchant can choose to pay for the return shipping or debit the consumer's account directly.
APX Logistics leverages both Parcel Select and Parcel Returns Service to offer merchants reliable and economical shipping solutions. The new returns program is yet another innovative way that APX Logistics has been able to generate substantial savings to merchants and provide a high-quality, information-intensive and consumer-friendly returns solution.
"The savings and efficiency are only part of the benefit," says Steve Korol, President of APX Logistics. "A simple and efficient returns process can play a significant role in improving the consumer's overall buying experience, which can favorably impact future sales, retention and lifetime value. In addition, merchants generally experience a decrease in operating expenses that further validates the importance of using APX Logistics as their returns provider."
For a consumer, having to return merchandise can be one of the most frustrating aspects of catalog or online shopping. The returns process a merchant has in place can influence whether the consumer will shop with them again."
Crazy Growth Be Prepared
With online shopping increasing at an incredible rate, it is no surprise that merchants could benefit from a solution for handling the equally increasing number of returns. Return rates vary by industry. As stated by F. Curtis Barry & Company, the high- fashion apparel market return rates range from 25% to 40%, while home décor return rates are around five percent to 10%.
With the estimated growth of e-commerce, merchants need to be proactive about finding a returns solution and getting it integrated into their operations. The Postal Service and their partners have found a way to provide a cost-effective and reliable returns service. Merchants that choose to take advantage of Parcel Returns Service will be better positioned to compete.
Michele Donahue is the Marketing Communications Manager for APX Logistics. Her experience in the marketing communications field and extensive industry research has allowed her to promote APX Logistics' new products. For information on APX Logistics, visit www.shipapx.com.