Let’s be honest. Logistics is hard. The retail industry is at a tipping point with an average brand expecting to lose 8% in margin by 2025 with the growth of eCommerce. Half of this margin reduction is attributed to logistics cost alone. As more and more customers adopt eCommerce, shipping expenses for both forward and reverse logistics will become a silent killer to brand growth.
The challenge is amplified in Canada where the population has low density and is stretched out across vast geographic regions. Based on an analysis the ReturnBear team conducted with ~70 retailers and hundreds of shipping labels, we found that logistics is a key barrier hindering CX and profitable growth for brands in our country.
- Top 3 cities - Toronto, Montreal, Vancouver, only make up ~30% of total shipping volume, leaving a long trail of isolated cities to be reached
- However, 66% of midsize retailers, have 2 or fewer DCs, increasing shipping cost and slowing fulfillment and replenishment
- With only one Toronto Hub, retailers spend ~$16 per return label on average, that’s ~28% of average retail basket Value
This analysis shows that logistics in the eCommerce era requires a complete re-think. Brands need to be closer to their customers who are scattered across the nation so they can ship items to them faster and cheaper. This is not an easy feat for any brand, small and large. The future of logistics needs to be reimagined in order to protect profitability and stay ahead of the curve on customers' increasing demands for speed and convenience .
At ReturnBear, we believe the future revolves around a purpose-built shared network that enables customers to Buy Anything, Return Everywhere (BARE 🐻). A decentralized position that has the necessary technology and operational processes to contend with increasingly complex omni channel execution. Returns account for 20-30% of ecommerce volume and are originating from a number of sources, including marketplaces, drop shippers and store assortments. It’s a daunting task that requires fresh thinking and approaches!
The sharing economy has been one of the biggest drivers of change in consumer behaviours in the past few years. We believe it’s time that businesses start thinking about the benefits of a shared model in their operations - not just on the digital side with cloud solutions, but also with physical solutions, like a shared logistics network. There is no longer a need to take on the huge capital burden of building a dedicated logistics network when there are shared networks, custom built to fit a specific purpose - like returns.
This is ReturnBear, a first–of–its–kind return solution in Canada - offering a shared network that accepts returns from multiple retailers at once, either at drop-off locations at Cadillac Fairview Shopping Centres or shipped back together in a single box to a ReturnBear processing hub. Our local solution puts return processing hubs near you, and reaches across Canada, enabling better customer experiences, faster processing times, and lowering the cost to serve by 30+%.
Today’s eCommerce challenges aren’t going away. Now is the time to rethink how we operate, and leverage new market opportunities. Using today’s best technologies and operating with purpose–built networks we reduce the back–to–stock–time, lower shipping costs and gain the convenience your customers demand — and we can turn ecommerce from profit-losing to profit-positive.
Want to build a no-regrets commerce economy with us?
Please reach out to my colleague Rob — we’d love to hear from you.