E-commerce returns: a holistic overview and future implications

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School of Business | Bachelor's thesis
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Degree programme
Tieto- ja palvelujohtaminen
E-commerce is emerging and its exponential market growth has started to take over the global retail market. Factors, like wide product range, the possibility of placing orders regardless of the time of the day and effortless comparison between different retailers and competitive prices are contributing in this booming phenomenon. E-commerce is concerned with a high amount of product returns making the distribution network complex. Hence, the sustainability and cost effectiveness of e-commerce returns can be questioned. These challenges can even determine one’s possibilities to operate in the field. The purpose of this thesis is to provide a holistic insight into e-commerce returns and develop a framework for practical implications and future research. First, a literature review about e-commerce reverse logistics is conducted in order to identify previous research and practises in the field. The literature review is followed by a comparative section, which will interpret the initially conducted framework and reflect it on challenging factors, such as different product types and different operational roles in the distribution network. In addition, to provide empiric data, an interview with Posti, the leading postal and logistics service company in Finland, was conducted. The findings indicate that the online environment creates a lot of avoidable returns. Elements, such as lenient return policy and the lack of physical inspection of the product has changed the consumer behaviour in e-commerce to rather irrational. Moreover, the structure of the return process has room for improvement. As certain amount of returns will always occur, this thesis further proposes solutions to combat these challenges. Finally, implications to research and practise are presented as well as limitations and suggestions for future research.
Thesis advisor
Tinnilä, Markku
e-commerce, returns, reverse logistics, third-party logistics
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