FedEx will allow customers to drop off online returns at Walgreens

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FedEx will allow customers to drop off online returns at Walgreens

US-based logistics company FedEx will allow customers to drop off online returns at Walgreens retail locations starting in November 2019, according to TechCrunch. To enable package returns, FedEx will provide Walgreens stores with printers, so that clerks can print shipping labels provided to consumers through the retailer conducting the return. The program builds on a two-year relationship between the companies, as thousands of Walgreens already serve as pickup and drop-off locations for FedEx packages. 

Reverse Logistics


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Introducing in-store return locations should help FedEx appeal to consumers, as the convenience of reverse logistics has become an increasingly important selling point.As online shopping has exploded in popularity, so too has the rate at which consumers return goods — return rates for e-commerce purchases are between 25% and 30%, compared with just 9% for in-store purchases, according to Invesp.

And consumers demand convenient returns, with 75% of US internet users actually preferring to drop off returns at brick-and-mortar stores, according to eMarketer. FedEx aims to have service locations within close proximity of all US consumers, and as of June 2019, 90% of consumers were within five miles of such a location. By adding return drop-offs to the approximately 9,600 Walgreens locations nationwide, FedEx can further increase convenience for consumers. If consumers feel that FedEx offers a significantly more seamless return experience than other logistics providers, retailers would in turn feel pressure to solicit the company’s services.

The Walgreens drop-off program adds convenience for FedEx customers, but logistics providers should also improve the retailer experience directly. Many retailers ultimately decide which logistics providers are available to consumers for returns — after all, retailers fund 90% of return shipments, according to KPMG.

FedEx and other providers should therefore work to enhance the retailer experience as well. For instance, logistics providers could use AI to help retailers better predict the volume of returns. They could also further implement Blockchain solutions to provide tracking to retailers throughout the return process. Many retailers would likely flock to a logistics provider willing to boost efficiency in such ways, as 56% of US retailers feel their margins are significantly impacted by returns, according to a Brightpearl survey from 2018.

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