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Product Returns Research Group (PRRG)

shrinkage ECR

Product returns are an increasing problem, especially in multichannel retail. For instance, many consumers find it very convenient to order products for Click&Collect and then return unwanted products to store. Many retailers consider dealing with returns as an unavoidable cost of doing business, yet they are unaware of the scale and importance of the returns problem. It is a multifaceted challenge that requires interdisciplinary solutions. We are a team of academics working with retailers and manufacturers to explore ways to streamline returns processes, assess the true costs of returns, influencing customer behaviour, making returns more sustainable, using circular economy concepts, and other aspects.

Our newest project, entitled "Forecasting and influencing product returns and fraud rates in a Covid-19 World" is funded by the ESRC.

Our article in The Conversation has been read over 70,000 times so far, been translated to Indonesian, and been picked up by over 50 Media outlets.

University of Portsmouth logo

The ground-laying project was conducted by the University of Portsmouth on behalf of the ECR Community Shrink and On-shelf Availability group, who are now called ECR Retail Loss group. A growing cross-institutional research group has emerged from it, with people working on various streams of research relating to product returns. The team currently includes researchers from the universities of Southampton and Portsmouth. We are also working with researchers from Cranfield, Sheffield and Sheffield Hallam. In 2022, we started to collaborate with Appriss Retail, who are generously funding three MSc dissertation project internships.

Appris Retail logo

We explore the applicability of circular economy principles to multichannel retail. Figure 1 shows the original version for manufacturing(used with permission, courtesy of Tecnologie del Filo, Tecniche Nuove, Milano), whereas Figure 2 illustrates the application of the circular concept to product returns.

 

General
Figure 1: Circularity in manufacturing.
Circular retail product returns
Figure 2: Circularity in product returns

 

 

 

 

 

 

 

 

 

 

Please get in touch with Gina Frei at (product-returns@soton.ac.uk) if you are:

There are a number of ways to work with us, including the following:

We look forward to hearing from you!

Woxsen International Lecture Series
Chain Reaction
Reverse supply chains
MembersJob role
Denise Baden Professor of Sustainable Business
Steffen Bayer Lecturer in Business Analytics
Regina (Gina) Frei Associate Professor of Operations and Supply Chain Management
Enrico Gerding Associate Professor
Lisa Jack Professor of Accounting at Portsmouth Business School
PK Senyo Lecturer in Information Systems
Jason Sit Senior Lecturer in Global Marketing at Portsmouth Business School
Gary Wills Associate Professor in Computer Science
Danni Zhang Research fellow, EDO Officer


We collaborate with the Reverse Logistics researchers at the Universities of Sheffield, Sheffield Hallam and Cranfield.

Former:

Dr Sally-Ann Kryzyaniak

Contact details

product-returns@soton.ac.uk

Please join our LinkedIn group

  • Sustainability in Retail Product Returns: An Investigation into the Role of Jobbers (RoJob)

    Online shopping is growing, and returns of purchases (including stock that became obsolete, outdated or damaged anywhere along the forward or reverse supply chain) are causing significant issues, both financially for retailers and in terms of environmental sustainability. Products returned in imperfect state, or out of season, are often auctioned off to third parties (‘jobbers’). We will use a multiple case-study approach based on sellers and buyers in the retailer-jobber to understand the different routes that products take once they are sold on through jobbers. Data collection will include interviews, observations and process mapping, supported by a review of academic, professional and media publications.

    Our underlying research questions are: “How sustainable are jobber operations, and can circular economy principles improve the value proposition for both retailers and jobbers?”

    The research objectives are:
    • Determine the value in jobbed products for the good of society and the environment; their potential to contribute to the Circular Economy and/or Sharing Economy.
    • Identify the stakeholders who benefit from jobbing.
    • Identify all the exit options (for example, sale, recycling) for returned products and other unsold stock sent to jobbers.
    •  Map the reverse supply chain, including identification of who is buying and selling the jobbed products down the chain.
    • Identify whether opportunities for fraud exist in the reverse supply chain.
  • Cost calculator: a tool to calculate the true costs of returning a product (more details to follow)
  • Consumer behaviours (details to follow)
  • Alternative business models (details to follow)

Finished projects

  • Buy online, return in store - no such thing as a free return, a project funded by the ECR Retail Loss group. Download our project report from their website

Other related projects

  • Food fraud
  • Green Stories 
    The Green Stories competitions engage writers in imagining positive visions of what a sustainable society might look like.
  • The Sharing Economy
    We are excited about the potential for more sustainable business models that disconnect financial returns from consumption, for example models based on access over ownership or sharing economy principles. Denise Baden has engaged in research on the existing landscape of Libraries of Things in the UK and is involved in setting up similar at the University so that the thousands of Chinese students who arrive every year, buy items such as kitchen items and then leave them when they return, can instead borrow them for the duration of their stay. As the cost of product returns becomes increasingly burdensome to companies, developing business models around borrowing rather than buying may start to make business sense, as well as providing a more sustainable form of access to goods.
  • PlastiCity project
    PlastiCity is an Interreg2Seas project (2019-2022) working on increasing plastics recycling rates in England (Southend-on-Sea), France (Douai), Belgium (Ghent) and The Netherlands (The Hague). Partners involved include city councils, waste recycling companies, waste collection companies, and universities.  Read more about it on the Capture Resources website.

Funding

The South Coast Doctoral Training Partnership (SCDTP)

The Thematic Cluster Pathways (TCPs): sustainability, environment & resilience (SER). 

See: https://www.southcoastdtp.ac.uk/thematic-cluster-pathways/sustainability-environment-resilience/

Deadline of studentships application: 

  • The application of studentships commencing in 2021/22 has now closed. Assuming the same deadline for the year 2022/2023. 
  • Funding - South Coast DTP
  • Funding Eligibility - South Coast DTP 
    • Before completing their online funding application form, students will need to have submitted an institutional application form for the chosen Masters or PhD programme. Students do not need to be in receipt of an offer of a place at that institution, but their application must have been submitted.

Electronics & Computer Science (ECS)

Southampton Business School (SBS)

  • Postgraduate Fees and Funding | Southampton Business School | University of Southampton
  • China Scholarship Council (CSC)-University of Southampton PhD Funding
    • Each year there are a number of CSC scholarships available across the University. To be considered for a scholarship within the Business School, students should identify an appropriate research area and contact SBS directly to enquire about funding opportunities in that area. We recommend that students make their application to us by early January stating that students wish to be considered for a CSC scholarship. Students can find further information about CSC scholarships at Southampton here.

The possible topics:

Topic 1: the benefits and challenges of implementing sustainable returns strategy

Most retailers list sustainability as an important aspect of corporate social responsibility and have a set of programmes to approach sustainability across their productions and forward supply chains. Many of them exclude product returns from their sustainability strategies or only consider the impacts of end-of-life products. This is plausible that they have only started paying attention to the financial impact of returns in recent years. Unfortunately, a rapid increase in returns and the activities of sending products back and forth have harmful effects on the environment, reflected in increased transportation, wasteful packaging, and increased greenhouse gas emissions. Additionally, many returned products cannot be resold and go to waste. There is an urgent need to implement sustainable operations and reverse logistics in returns.

Our current product returns project identifies a clear gap in implementing sustainable strategies on product returns across the retail industry. While various recommendations have been proposed for reducing the environmental impact of product returns and embedding the returns to the corporate sustainability omissions, the cost and benefits are unclear and lack scientific evidence. That is, the scientific understanding of returns and their degrees of (un-)sustainability is still at an early stage.  For example, the study by Jack et al. (2019) has suggested that organisations should encourage manufacturers to redesign their products for easy disassembly, repair, recycling that would benefit the returns management. However, retailers are uncertain about the costs and benefits of implementing sustainable strategies.

Therefore, future studies could build a simulation model to quantify (1) the financial benefits (e.g., the savings on refurbishment cost) and (2) the amount of reduced wastes and energy-saving if a number of sustainable approaches have been implemented in product return, in contrast to the circumstance where non-sustainable approaches are employed.  
We believe that having such further research not only makes theoretical contributions in the field of sustainable returns’ operations and circular economy but also could motivate organisations and policymakers to implement sustainable strategies on product returns in practice. 

Topic 2: the environmental assessment methods of product returns

A growing body of literature recognises the importance of developing sustainability management in operations. Several environmental assessment methods (e.g., Material flow analysis, Life-cycle assessment) have been well-established to assist practitioners in making more sustainable decisions in their forward supply chain. These include material flow analysis (MFA), life cycle assessment, Economic Input-Output Life Cycle Analysis, and material flow cost accounting. However, there is limited research in building a systematic assessment approach to evaluate the environmental impacts of returns or reverse supply chains more generally. It is plausible to use the forementioned methods in reverse supply chains to evaluate the impact of returns.

For example, the assessment of MFA can quantify and evaluate energy use and substance flows, and their effects on the environment within a well-defined framework. It is extrapolated that within a reverse supply chain, MFA may help practitioners to map, quantify, inspect, and evaluate the environmental influence of the flows (e.g., materials of package and carbon emissions) that are associated with the returned items at each stage of a reverse supply chain. Meanwhile, practitioners can use the MFA method to compare the different returns-process options (e.g., disposal vs. refurbishing) by calculating the quantity of their environmental impacts. That is, the findings generated by MFA provide scientific evidence that assists practitioners in making more sustainable decisions. 

Thus, a research project to explore the effectiveness of different assessment methods on measuring the environmental impact of returns throughout the reverse supply chain is worthwhile. This could help practitioners find new solutions for reducing returns’ negative impact on ecological sustainability and the possibility of placing future resources at risk. In other words, having environmental assessment methods is crucial for practitioners to embed circular economy values within their reverse supply chain’s operation.

Other possible research directions on sustainability:

  1. Case study: the influence of sectoral differences (or product categories) on the developmental progress of sustainable returns strategy.
    • The electronic industry seems to have well-established sustainable management and plans on returned products. This might be because the martial of electronic products are relatively valuable and durable, in contrast to other industries, such as the apparel industry. Therefore, a comprehensive understating of sectoral differences would help practitioners establish more appropriate sustainable plans on product returns.  

  2. The importance of integrating product returns, forward supply chain and productions on sustainable strategies. 
    • Our current product return project finds that product waste can be caused by the under-developed order system or the unsustainable operations in the forward supply chain. For example, inaccurate records of product stock or product barcodes result in wrong orders, which cause subsequent waste in returns. Further research that examines the links between the production line and product returns is needed.

Topic 3: Consumer behaviour of fraud returns

Key words:  prospect theory, risk-seeking, the utility theory, agent-based modelling 

Fraud returns is rapidly becoming prevalent for modern retailers because of liberal returns policies. Kind (2004) highlighted that fraudulent returns could erase 10%-20% from a retailer’s profit margin.  Our current returns project investigates the influence of return policies and various interventions on different types of fraud returns. We suggest that fraud behaviour could be related to how people perceive risk. Applying the prospect theory, it assumes that offenders try to maximise their utility, that is, their fraud behaviour depends on costs (risk) vs. benefits. Further investigation and experimentation on how individuals perceive the risk (cf. benefits) of involving in fraud returns is recommended.

The data collection could be via survey with various experiment settings which offer different scenarios by asking individuals to make discrete choices, and then identify when they switch their choices while facing different gains and losses. For example, if there is an 80 % chance of getting a refund when returning a product dishonestly, but the chance of getting caught (with various interventions and types of fraud) is 20 %, what would participants do (quit or engage with the fraud returns).  By doing so, the experience can quantify the costs and benefits, and then translate that behaviour into an agent-based model. Further modelling work could determine the extent of different types of interventions in great detail.  
 
Jack, L., Frei, R., & Krzyzaniak, S. A. C. (2019). Buy online, return to store: the challenges and opportunities of product returns in a multichannel environment. 

Topic 4: AI & Fraud prevention for in-store shopping

Increasingly, technology is used to reduce in-store fraud and theft. A promising technology is the use of RFID tags on products such as clothing. These tags are cheap to produce and can detect the items from within a certain range. There are wide-ranging applications of RFID tags including inventory management, unmanned stores and preventing fraud. Several types of fraud can be easily prevented due to the ability to identify a unique clothing item and being able to match this to the transaction. Also, the items can be tracked within the store and when leaving the store. There are also opportunities to use AI to predict the likelihood of fraud, enabling a timely intervention to occur before the fraud takes place. While the technology raises many opportunities, there are also ethical and legal concerns, e.g. in terms of privacy and potential bias in the data and algorithms. There are also opportunities to improve sustainability especially in the clothing industry (Denuwara et al, 2019). This project is about investigating both the opportunities and the ethical concerns, how technology can be used to address some of the concerns, and what people find acceptable. There is a strong connection with the responsible innovation agenda, as well as trustworthy autonomous systems.

S. L. Garfinkel, A. Juels and R. Pappu, "RFID privacy: an overview of problems and proposed solutions," in IEEE Security & Privacy, vol. 3, no. 3, pp. 34-43, May-June 2005, doi: 10.1109/MSP.2005.78.

Denuwara, N.; Maijala, J.; Hakovirta, M. Sustainability Benefits of RFID Technology in the Apparel Industry. Sustainability 2019, 11, 6477. https://doi.org/10.3390/su11226477  

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