Opinion: Logistics Leaders Must Prioritize Reverse Logistics Strategies in 2025

By 2030, Gartner predicts e-commerce retailers and consumer electronics companies will spend twice as much on managing reverse and returns logistics compared to outbound orders and deliveries. The shift underscores the urgent need for logistics leaders to prioritize circular processes to manage risk, reduce complexity, and gain better visibility.

For some specialty retailers, only 35% of what is returned is resold at full price, according to Gartner research. These companies have to double and triple their logistics costs to retail a single item, but what’s worse is the 65% of returns that are discounted or not resold at all. The impact of having to write off both outbound and return logistics expenditures is significant.

As enterprises navigate the growing complexities of managing returns, logistics leaders would be wise to prioritize reverse logistics technologies. Future higher demand for reverse logistics services is not conjecture. What is unclear at this point is how big that demand will be, how companies will prepare, and how they propose to manage the costs. Regulation, coupled with consumer pressures, will accelerate the need for businesses to more accurately forecast their returns volume.

Logistics leaders will also need to work on strategies such as those encompassed by circular supply chains that build in activities such as returns, repairs, and the reuse of items and components. To begin, consider the following steps:

• Take Ownership of Reverse Logistics Strategy: Enterprises must take ownership of their returns and reverse logistics strategy. This involves organizing resources to capture the cost of returns, detailing associated complexities, and creating a centralized team responsible for overseeing the process and implementing performance metrics.

• Integrate Reverse Processes: Building a "reverse process" into every outbound logistics process is crucial. This process-mapping activity identifies opportunities for circularity and exposes gaps in capabilities, inefficiencies, and unnecessary expenditures.

• Factor Logistics in Product Design: Logistics should be integrated into the new product design stage, including discussions around packaging, distribution network design, and physical routes to market. This ensures that returns and reverse logistics are managed efficiently, with clear cost implications.

• Dedicated Reverse Logistics Strategy: Strengthen focus on reverse logistics by designing and implementing a dedicated strategy that deals with returns. Collaborate with other supply chain functions to forecast and plan for the quantity and complexity of returns. Implement separate budget and performance measures that capture and report on the costs and service delivery associated with reverse logistics.

• Reinvent Logistics Sourcing and Procurement: Logistics leaders who rely on legacy outsourcing strategies face cost volatility, varying service levels, and lack of innovation. It is essential to reinvent logistics sourcing and procurement to adapt to the changing role of third-party logistics suppliers and the evolving technological landscape.

David Gonzalez, VP Analyst, Gartner Supply Chain

To learn more about technologies and strategies to manage logistics, join Gartner experts and logistics and supply chain leaders at the Gartner Supply Chain Symposium/Xpo in Orlando, FL on May 5-7.

David Gonzalez is a research vice president in the logistics, customer fulfillment and network design team of the Gartner Supply Chain practice. The views expressed in this post are that of the author, and don’t necessarily reflect the views of The Supply Chainer.