Dive Brief:
- Gap Inc. — which owns Gap, Old Navy, Athleta and Banana Republic — partnered with returns technology company Optoro to diversify its reverse logistics and fulfillment offerings, the companies announced last month.
- Optoro’s returns platform, which integrates with Gap’s existing system, initiates exchanges or returns and speeds up processing times to optimize restocking efforts, Amena Ali, Chief Executive Officer of Optoro told Supply Chain Dive.
- The retailer also activated Optoro's packageless Express Returns drop-off service at Staples stores, which will help drive savings on consolidated returns shipping, the CEO said.
Dive Insight:
The returns management aspect of Optoro’s software aims to “get goods back into circulation [to] reduce the amount of markdowns and process it more efficiently,” Optoro’s Ali said. This includes smart routing, inventory and warehouse management after receiving a return.
The journey of the return back to the warehouse can get tricky, especially when taking into account warehouse visibility and processing speed, Ali noted. For instance, when there might be a backlog of returns being processed, retailers might miss the opportunity to move or sell inventory during a peak selling window.
“How do you actually track returns … at the SKU level and at the product level, from initiation to processing and back so you can really optimize the entire lifecycle of the return?” the CEO asked.
Gap is one of the many retailers looking to strengthen their reverse logistics chain to optimize operations and curb shipping costs.
With express returns, for instance, Gap may get the benefit of consolidating shipping.
“Because you don’t have everyone’s product shipping individually, they can save about 20% on shipping costs, which is typically one of the highest aspects of processing a return, and that cost can be as much as $20 to actually process,” according to Ali. “You [have] to ship it somewhere, you need to examine it ... and then send it to its next best home.”
Following years of pandemic-spurred challenges across its supply chain, Gap began strengthening its logistics and fulfillment capabilities. Last year the retailer launched GPS Platform Services, an omnichannel fulfillment solution. GPS also offers reverse logistics services.
More recently in February, Gap teamed up with UPS unit Ware2Go to give shippers access to the retailer’s fulfillment and distribution services.
Correction: This story has been updated to reflect that the Returns drop-off service is available at Staples stores.
