Podcast Title: The Agile Brand with Greg Kihlström®
Episode: #662: Making Your Returns Strategy a Competitive Advantage with Katherine Lehman, ReturnBear
Release Date: April 11, 2025
Introduction
In episode #662 of The Agile Brand with Greg Kihlström®, host Greg Kihlström engages in an insightful conversation with Kathryn Lehman, the Chief Marketing Officer of ReturnBear. Recorded live at Shop Talk 2025 in Las Vegas, the episode delves into the evolving landscape of reverse logistics and how an effective returns strategy can transform business operations into a substantial competitive advantage. This comprehensive discussion covers critical aspects such as customer retention, cost management, environmental sustainability, micro fulfillment, fraud prevention, and the future trajectory of returns management.
Guest Profile: Kathryn Lehman, CMO of ReturnBear
Kathryn Lehman brings over six years of experience in the logistics sector, specializing in reverse logistics and sustainable return solutions. Since joining ReturnBear in October, Kathryn has been instrumental in steering the company towards innovative practices that not only streamline the returns process but also enhance customer satisfaction and environmental responsibility. Her passion for logistics and commitment to sustainability position her as a thought leader in transforming returns from a logistical burden into a strategic asset.
Reverse Logistics Defined
Reverse logistics encompasses all processes involved when products are returned by customers. This includes the Return Merchandise Authorization (RMA) process, the journey of the returned item, decisions on whether to restock, liquidate, or dispose of the product, and eventual redistribution or resale.
Kathryn explains:
“Reverse logistics is everything that happens when you need to make a return… where the package goes, is it going back into sales, is it getting liquidated, what happens to it? All of that is part of the reverse logistics process and it's probably the most complicated part of logistics.”
[03:15]
Returns as a Strategic Advantage
Many companies view returns as a necessary expense, but Kathryn emphasizes their potential as a strategic advantage. By optimizing the returns process, businesses can enhance customer retention, reduce costs, and contribute to environmental sustainability.
Customer Retention:
A seamless and efficient returns experience fosters customer loyalty. Kathryn notes:
“A great return experience is going to keep that customer with you… you want it to be easy, you want it to be fast, you want to get your money back and you want to have a good experience and move on.”
[03:52]
Cost Management:
Improper handling of returns can be costly, especially for cross-border transactions. ReturnBear mitigates these costs by:
- Consolidation: Minimizing repeated shipments by verifying and restocking items promptly.
- Micro Forward Fulfillment: Quickly reintegrating returned items into inventory to capitalize on seasonal demand.
Kathryn highlights:
“The faster you can turn it over, the more profit you're gonna make… you have to make it available to them right away.”
[07:07]
Environmental Sustainability:
Efficient reverse logistics reduces the carbon footprint by cutting down unnecessary shipments. Kathryn states:
“We activate in Canada, the U.S., the U.K., and Australia… shipping it all the way across the world… it has to go all the way back… we're cutting down on that carbon footprint.”
[05:56]
Micro Fulfillment Strategies
Micro fulfillment involves localizing return processing to ensure rapid restocking and availability of products. This strategy is particularly beneficial for smaller e-commerce brands competing with larger players by providing:
- Enhanced Inventory Management: Rapid verification and reintegration of returned items prevent stockouts and lost sales.
- Improved Customer Service: Products are readily available within the customer's geolocation, reducing wait times.
Kathryn explains:
“If you have things being returned at any given time, 20% of a company's inventory is tied up in returns… the faster you can make that process to verify it and get it ready for resell… the more profits you're gonna get.”
[06:11]
Fraud Prevention in Returns
Return fraud poses a significant threat to retailers, particularly in the online shopping realm. Kathryn outlines ReturnBear's approach to mitigating fraud without compromising the customer experience:
- Human Verification: Unlike automated systems, ReturnBear employs human inspectors to authenticate returned items on the spot.
- Instant Refunds: Customers receive immediate refunds upon verification, enhancing satisfaction while eliminating fraudulent returns.
She emphasizes:
“We are humanly verifying those products… the fraud is eliminated… we eliminate fraud 100% because we have a human looking at that item.”
[09:52]
Evolution and Future of Returns Management
The returns process has undergone significant transformation, largely influenced by Amazon's customer-centric return policies. Kathryn forecasts continued evolution with a focus on:
- Customer Expectations: As consumers become accustomed to free, fast, and hassle-free returns, retailers must adapt to meet these heightened expectations.
- Sustainability Awareness: Increased public consciousness around environmental impacts drives demand for greener returns solutions.
- Technological Integration: While currently relying on human verification, future advancements may incorporate AI to enhance efficiency further.
Kathryn comments:
“Amazon kind of turned that around and said, no, no, we're going to make it free. We're going to make it easy… reality is returnwear gives that Amazon level experience.”
[11:00]
Sustainable (Green) Returns Practices
Green returns focus on minimizing environmental impact through optimized logistics. Key practices include:
- Shortest Shipping Distances: Reducing the physical distance returns travel by strategically locating return centers.
- Consolidated Shipments: Combining multiple returns into single shipments to decrease the number of transport trips.
- Packaging Efficiency: Eliminating unnecessary packaging materials and labels to reduce waste.
Kathryn outlines:
“It's the shortest amount of distance imaginable to ship it forward… package free, label free… consolidating everything together and shipping it together… sending one pallet on the ocean instead of individually sending packages.”
[13:23]
These practices not only support environmental sustainability but also result in significant cost savings for businesses, with Kathryn citing up to a 60% reduction in return-related expenses.
Staying Agile in Logistics
Agility is paramount in the logistics and marketing sectors to adapt to rapid changes and emerging trends. Kathryn shares her personal strategy for maintaining agility:
- Continuous Learning: Staying updated with the latest technologies and industry developments.
- Embracing Innovation: Being an early adopter of new technologies and practices.
- Active Engagement: Participating in industry events and discussions to gain diverse insights.
She states:
“I'm always reading. I'm always learning and listening and trying to find new things… just keep learning.”
[14:48]
Key Insights and Conclusions
- Strategic Value of Returns: Efficient reverse logistics can drive customer loyalty, reduce operational costs, and enhance sustainability efforts.
- Micro Fulfillment as a Competitive Edge: Localized and rapid returns processing enables smaller brands to compete effectively with larger enterprises by ensuring product availability and swift customer service.
- Human-Centric Fraud Prevention: Utilizing human verification ensures the authenticity of returns, safeguarding businesses against fraud while maintaining a positive customer experience.
- Sustainability as a Business Imperative: Green returns not only protect the environment but also offer substantial cost savings, aligning with the values of the modern, environmentally conscious consumer.
- Agility Through Continuous Learning: Embracing a mindset of perpetual learning and adaptability is crucial for businesses to stay relevant and competitive in the dynamic market landscape.
Notable Quotes
-
Kathryn Lehman on Reverse Logistics Complexity:
“Reverse logistics is everything that happens when you need to make a return… it's probably the most complicated part of logistics.”
[03:15] -
Importance of Customer Experience in Returns:
“A great return experience is going to keep that customer with you… you want to have a good experience and move on.”
[03:52] -
Cost Savings through Efficient Returns:
“We eliminated so much of the cost for our merchants, up to 60% of savings on returns.”
[14:15] -
Agility as a Continuous Process:
“Just keep learning.”
[14:48]
Conclusion
Episode #662 of The Agile Brand with Greg Kihlström® offers a deep dive into the transformative potential of a well-executed returns strategy. Kathryn Lehman's expertise underscores the multifaceted benefits of reverse logistics, from enhancing customer loyalty and operational efficiency to promoting environmental sustainability. As the retail and e-commerce landscapes continue to evolve, adopting agile and innovative returns processes will be pivotal for brands aiming to thrive in a competitive market.
For more insights and episodes, visit The Agile Brand.