Sustainability efforts are linked to customer satisfaction. Credit: ESB Professional via Shutterstock.

According to a survey by Software Advice, small and midsize (SMB) retailers believe that implementing sustainability into returns processes is critical for recouping costs and customers.

Improved returns processes have led to benefits in customer satisfaction, cost optimisation, and increased brand competitiveness for respondents.

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A significant 93% of SMBs prioritise sustainability when managing customer returns, and 58% say inventory cost optimisation is a benefit of their current returns process.

SMBs have focused on a variety of tactics to improve their returns strategy–from logistics to packaging:

  • 59% of SMB retailers use environmentally friendly logistics, compared to 43% last year.
  • 49% partner with third-party experts to manage product returns, a jump from 31% in 2022.
  • 63% use right-size packaging, and 55% of SMB retailers use recyclable/reusable shipping boxes.

Smaller retailers are increasingly recognizing that returned products, if triaged appropriately, can be resold or recycled, reducing waste and recovering some lost sales. In fact, 51% of retail SMBs report recycling as a top action when managing returned items, followed by repackaging and refurbishment. Due to these tactics, 35% say they can recoup over half of the cost of a returned product.

Beyond recouping costs, an effective and sustainable returns process can support a retailer’s standing in the market. This year, 41% of retail SMBs say their current returns process has increased their brand competitiveness. Nearly two in three (64%) cited increased customer satisfaction from their current returns process, a significant jump from 35% in 2022.

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While sustainability efforts are linked to customer satisfaction, 63% of small retailers admit their company’s actions don’t align with their public messaging, a rise from 46% in 2022.

To avoid misalignment in actual efforts and messaging, it’s important to effectively track reverse logistics. Technology like point of sale, inventory management, and business intelligence software can help provide visibility into the process.

SMBs can also reap the benefits of experiential retail by taking advantage of their location and by offering in-store events or services to drive engagement at minimal expense.