SMBs not living up to sustainability claims about returns

Small and midsize retail (SMBs) believe that sustainability should play a decisive role in managing returned items but their actions don’t line up with their beliefs or public statements.

A new survey of supply chain managers has found that a majority (89 percent) of retail SMBs say that sustainability is an important factor in their reverse logistics strategy, but only 54 percent report disposing of materials responsibly.

Nearly half (46 percent) of supply chain professionals say their company’s communication about sustainability efforts doesn’t accurately reflect what’s actually being practiced.

Silos don’t talk

Logistics and marketing teams are often siloed, and this contributes to the misalignment between a company’s sustainability practices and their public messaging. This discrepancy is more extreme among brick-and-mortar stores where 31 percent report misalignment, compared to online retailers, where it’s 17 percent.

“Inaccurate statements can hurt a retailer’s reputation, especially as more businesses face public scrutiny for greenwashing or false sustainability promises,” said Olivia Montgomery, associate principal supply chain analyst at Software Advice, which produced the survey.

“Work to break down silos across marketing and logistics teams to help customers better understand your sustainability efforts.”

Better packaging

Setting up a more sustainable reverse logistics process begins with eco-friendly packaging and reducing returns. Of the businesses that say sustainability is an important factor in their reverse logistics strategy, 58 percent are designing their shipping boxes to be recyclable/reusable and 56 percent use right-size packaging.

Online retailers are keeping return rates low by discouraging returns. Their efforts seem to be paying off as online-only stores report a lower return rate than brick-and-mortar stores in 2021.

The top actions taken by online SMB retailers to reduce returns include providing extensive product information on their website–used by 58 percent of online SMB retailers–and packaging that prevents damage during shipping, used by 56 percent.

More than half of those surveyed (52 percent) say they repackage and re-sell returned items, while 46% repair items to be resold. While varying product designs and material types impact what a business can do with an item after it’s been returned, repackaging and repairing products helps them recoup costs.