Reverse eLogistics May Offer Service Providers Big Returns, IDC Says
FRAMINGHAM, MA, FEBRUARY 26, 2001 – Returning products bought online is proving frustrating for consumers and etailers alike. Their frustrations, though, are creating a golden opportunity for service providers who can help simplify the process. According to IDC, a new type of service provider is emerging to deal with ereturn management – the recovery of products sold online, including the proper care, packaging, and method of accounting for goods that have been returned or exchanged.
"Consumers complain of inadequate information about how to return products purchased online, the high cost of shipping these returns, and slow or missing credit refunds. Meanwhile, etailers are grappling with the logistics of processing returns, controlling the cost of accepting returned goods, and issuing refunds and credits," said Romala Ravi, a senior analyst with IDC's eLogistics research program. "These difficulties create a great opportunity for service providers who can address these issues."
According to IDC, new business models have emerged with new service providers trying to cash in on the opportunity. These service providers try to simplify the return process for the consumers by ensuring consumers don't have to go out of their way to return the product. Service providers do this by making the drop-off options more convenient or by enabling customers to print return shipping labels from the comfort of their homes.
"By making the return management process less cumbersome, service providers can improve customer satisfaction with etailers," Ravi said.
eTailers are becoming increasingly willing to seek help from service providers with their reverse elogistics. IDC forecasts demand for ereturn management outsourcing will soar from $1.2 billion in 2000 to almost $7.5 billion by 2004.
IDC recently published eReturn Management Outsourcing Promises Great Potential (IDC #B23695). In researching this bulletin, IDC interviewed more than 300 B2C retailers in a variety of product categories. The bulletin documents their ereturn management challenges and satisfaction levels, investigates if they do or will outsource these services, and the factors involved in the decision. A forecast for ereturn management outsourcing demand is provided, and the different types of return service providers are investigated.
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IDC is the foremost global market intelligence and advisory firm helping clients gain insight into technology and ebusiness trends to develop sound business strategies. Using a combination of rigorous primary research, in-depth analysis, and client interaction, IDC forecasts worldwide markets and trends to deliver dependable service and client advice. More than 700 analysts in 43 countries provide global research with local content. IDC's customers comprise the world's leading IT suppliers, IT organizations, ebusiness companies and the financial community. Additional information can be found at www.idc.com.
IDC is a division of IDG, the world's leading IT media, research and exposition company.
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