Understanding and addressing risks and uncertainties in omnichannel product returns: A series of empirical studies

Abstract

The objective of this dissertation is to build research at the intersection of consumer returns management and supply chain risk management. As organizations confront the challenges of an ever-increasing volume of returns, practitioners and academics aggressively search for opportunities to improve returns management effectiveness. This dissertation aims to contribute to the effort by extending supply chain risk management concepts into the returns management domain. This is done by identifying risk mitigation strategies that change the actions of omnichannel retailers and their customers. Chapter 2 studies the phenomenon of customer procrastination, which is a source of costly time-related delays in the returns management process. We identify a strategy retailers can use to regain possession of returns faster and reduce time-related uncertainty. We find that a home pick-up service can be a viable strategy for reducing the amount of product value lost while keeping operating costs at a reasonable level. Chapter 3 explores how to reduce uncertainty in the flow of returns by influencing the customer decision-making process. We study the impact of behavioral nudges used to steer customers toward a specific return channel preferred by the retailer. This study shows that customers’ cognitive biases and heuristics can be used as a risk mitigation tool. The research findings in this dissertation demonstrate that consumer returns pose a risk to omnichannel retailers and propose mitigation approaches to reduce two sources of uncertainty. We highlight the theoretical and practical implications of this research and establish a groundwork for future exploration of these topics.