Reverse logistics, the art of processing returns and the bane of the online e-commerce industry, will get a much-needed boost this shopping season as logistics company Newgistics Inc. and the Spiegel Group use Web services to collect and integrate return information into backend systems.
The Spiegel Group will launch this week a returns process that allows its customers to bring returned items to any one of 4,000 retail parcel centers.
"As a direct marketing company we've been doing this for a long time. This allows us to provide another convenient option to keep our customers," said a Spiegel spokesperson. The company has seen a 63 percent revenue increase over the last three quarters to US$215 million in its online business revenue.
Newgistics is partnering with such point-of-return parcel centers as AIM Mail Centers, Associated Mail & Parcel Centers, Handle with Care Packaging Store, Neighborhood Postal Centers, Pak Mail, Parcel Plus, PostalAnnex, PostNet International Franchise, and independently owned centers, totaling approximately 4,000 locations in the United States.
In a phased rollout, each of the 4,000 parcel centers will have Internet access to a Newgistics solution called ReturnValet. The ReturnValet interface at the parcel center connects to ValetWare, a standard Windows application, running over dialup or VPN (virtual private network), which connects to Spiegel's order management, financial, and warehouse management systems using a Web services SOAP (Simple Object Access Protocal) interface.
"SOAP XML is used to transfer the messages to our point of return server and then that server transfers to Spiegel," said Ed Stashluk, vice president of Technolgoy at Newgistics in Austin, Texas. "Spiegel has a standard [Web service] merchant interface and WSDL defines the interface. In the Web Services world, there are just two elements to using Web services, one is discovery, to discover how the interface works, and the other is executing the service."
Creating SOAP connections also gives Newgistics a more flexible interface which will allow them to add additional services for Spiegel and then reuse those services with new clients, according to Stashluk.
The Spiegel/Newgistics system allows a customer to bring a package in to any participating parcel center where the invoice number is keyed in. The invoice number executes in real time all of the customer and order management information. The system can reflect the company's business rules, offering a credit right to the end customer there at the return center.
Packages returned to a center will be held and aggregated for a predetermined number of days, usually about three, picked up using R. R. Donnelley Logistics services and returned to the correct company warehouse, according to Stashluk.
Before the returns ever get to the warehouse, return information is available to the warehouse management system so that warehouse personnel can allocate resources, such as shelf space and personnel, prior to its arrival.
Although many companies make money on shipping products to consumers, returns are an expense and often lead to an unhappy customer experience. For shoppers, the system will offer a faster reconciliation of the bill. By controlling and streamlining the method of return, costs are reduced for the supplier, Stashluk said.
For customers not willing to visit a parcel center, Spiegel is also working with Negistics on a smart label bar code system that still gives the company advanced notification that correlates back to order information and will allow the package to be routed more efficiently to the appropriate warehouse.
Newgistics is a Microsoft designated "early adopter" of Microsoft's .Net platform.
Newgistics customers also include Lillian Vernon and Princess House.