Outsourcing returns unlocks margin and improves speed to stock while alleviating backlog
Early into the COVID-19 pandemic, American Eagle Outfitters (AEO) faced an urgent dilemma caused by a backlog of returned inventory piling up in distribution centers due to temporary store closures. AEO turned to Optoro’s Returns Management solution to solve their immediate challenge, but also to automate their returns processing for ongoing long-term benefit. Within weeks, Optoro’s returns technology had cleared the backlog of over 600,000 units. And within two months of installing the software, AEO was also able to disposition inventory returns at scale. This allows AEO to process returned American Eagle and Aerie inventory quickly and efficiently, improving their speed to stock and ability to resell returns at full price. By getting inventory back on shelves faster, they are also able to significantly improve the customer experience by avoiding stockouts.
Optoro’s software has helped us to significantly improve our returns process operationally, as well as our customer experience. It also gives us great visibility into our end-to-end returns network.
Manual returns processing leads to pile-up of returns and slow restock timelines
Just weeks after stores closed due to COVID-19, a backlog of returned inventory was impacting productivity. Returns processing was very manual and research heavy, causing delays in both refunding the customer and also sending high-demand goods back to stock where new customers were waiting to purchase them. AEO sought a solution that would free up capacity and also help build a long-term returns solution at scale.
Increasing speed to re-stock leads to better margins and customer experience
Optoro’s workflow tools sped up and automated what used to be a very manual returns process. Quickly and efficiently processing returns allowed AEO to get items back to stock quicker, resulting in fewer discounts being needed and fewer out-of-stocks for future customers.
Flexible returns processing model enables forward fulfillment and drives growth
Pre-COVID, AEO had two US-based returns centers handling all returns, and this made it hard to respond to new inventory challenges. By using Optoro, AEO now enables a nationwide network of returns nodes to accept all types of returns quickly and easily.
By clearing out the backlog and efficiently processing new returns at scale, AEO increased their capacity to fulfill ecommerce orders that have spiked since the start of the COVID-19 pandemic. Inventory management and fast order fulfillment are at the heart of AEO’s success. Focusing on its core business and delivering for customers enabled AEO to grow through a challenging period, deliver stellar Q3 results, and positioned the company well for the key holiday season.
One holistic platform delivers visibility and insights for better decisions
AEO now has a single view of their returns lifecycle across return points including stores and distribution centers. As a result of the newfound visibility, AEO can now easily identify product quality issues through returns trends, make proactive decisions around inventory, and pinpoint areas to improve the customer experience.
About the Customer
American Eagle Outfitters, Inc. (AEO) is a leading global specialty retailer offering high-quality, on-trend clothing, accessories and personal care products at affordable prices under its American Eagle® and Aerie® brands. Headquartered in Pittsburgh, the company operates and licenses stores in the United States and internationally. AEO’s purpose is to show the world that there’s REAL power in the optimism of youth. Like other retailers, AEO has seen digital demand surge during the pandemic, especially for its lifestyle brand Aerie. Inventory optimization and ability to keep up with changing demand have been central to AEO’s growth and success. To learn more, visit aeo-inc.com.
Who Does the Solution Help
Supply Chain, Operations, Finance, Logistics, Ecommerce, and the C-Suite