Many Happy Returns

This is an excerpt of the original article. It was written for the March-April 2022 edition of Supply Chain Management Review. The full article is available to current subscribers.

March-April 2022

Yesterday, I hosted a webinar on the steps supply chain leaders are taking to redesign their supply chains to cope with this period of unprecedented demand. Earlier last month, I attended the Manifest conference in Las Vegas. The exhibitors featured a lineup of supply chain startups while the attendee list was dominated by venture capital firms looking to get in on the action in our booming industry. This morning, one of the lead news stories is about another disruption threatening to bring global supply chains to a halt:

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We’re all familiar with the saying “may you live in interesting times.” Depending on when it’s said, the proverb can be interpreted as either a blessing or a curse.

There’s also the proverb—many happy returns. It’s usually intended to wish someone a long string of future birthdays. However, many happy returns is now emerging as the proverbial blessing and a curse in the supply chain.

“Most companies look at returns as a necessary evil (curse) and don’t treat them much better than you might expect,” says Nick Vyas of the Marshall School of Business at the University of Southern California. But he insists that returns deserve more respect than that. In fact, returns and returns policies are actually an open door to ever higher sales and profits (blessing), especially in e-commerce. At USC, Vyas is the Kendrick executive director of the Global Supply Chain Management Institute and associate professor of clinical/data science and operations.

Yes, we do live in interesting times.

The returns profile

Given the dislike many in the supply chain have for returns, there should probably be a scapegoat for making them acceptable in the first place. Some give that honor to Zappos, the e-commerce shoe merchant that has been a part of Amazon since 2009.

From its start 10 years earlier, Zappos worked hard to eliminate any stigma to returning its shoes. In fact, the company encouraged customers to order an array of shoes and send back, for free, whatever didn’t fit or the customer didn’t like for whatever reason, no questions asked. It was just a necessary part of e-commerce transactions.

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