Intro/Outro (00:03):
Welcome to Supply Chain. Now the voice of global supply chain supply chain now focuses on the best in the business for our worldwide audience, the people, the technologies, the best practices, and today’s critical issues, the challenges and opportunities. Stay tuned to hear from Those Making Global Business happen right here on supply chain now.
Scott Luton (00:32):
Hey, good morning, good afternoon, good evening. Scott Luton here with you on Supply Chain. Now welcome to today’s show, big show today as we continue our reverse logistics leadership series here at Supply Chain now. And today we’re gonna kind of get a state of the union of sorts from one of the leading voices in all of reverse logistics and returns management. So, with that said, join me in welcoming one of our dear friends, longtime repeat guest featured guest here today. Tony Sciarrotta, executive director of the Reverse Logistics Association. Tony, how you doing?
Tony Sciarrotta (01:07):
I’m doing great, Scott. Hello to you and to everyone in your community. I love the, uh, supply chain now broadcast network as the voice of the reverse logistics industry. I love it, Scott. Man,
Scott Luton (01:19):
That’s beautiful to my ears. But you know, I wanna point something out cuz there’s all kinds of folks that make up the associational space, right? But you, Tony, some of our folks may not recall that you were doing big things in this space, a reverse space, a return space with Phillips for like a couple of decades prior to leading rla. Is that right?
Tony Sciarrotta (01:40):
Absolutely. You know, it’s interesting. Uh, I was a sales guy, happy-go-lucky sales guy most of my life at Sony for a few years. I never saw returns at Phillips. It was a number you got hit with at the end of the month. Uh, and then that one day they picked me out of a hat and said, oh, go fix the returns problem. It’s only like 12%, uh, returns and electronics. And, uh, you know, I am, I feel very fortunate to have found the right people to have learned from and to have made a huge difference. It, it doesn’t make me a rockstar or anything that cool, but it’s, it’s an acknowledgement that you can make a huge difference to your company. And I’ve, I’ve been very fortunate to be successful at that. It was amazing to me. I look back, it was amazing.
Scott Luton (02:24):
Tony, you’re too humble. Uh, and I’ve heard some of the story behind the story, which, you know, the, in terms of impact and the innovation and the ideas and, you know, would, before we get into a, a fun warmup topic, would you agree that your introduction, right, uh, you didn’t go to school for reverse logistics or returns management, you know, would you agree that that was kind of, a lot of folks got their start in the reverse and the return sod kinda like you?
Tony Sciarrotta (02:50):
I think so, actually, it’s unfortunate, Scott. I think a lot of ’em come out of the finance and service world. Hmm. And that’s just the wrong approach to solving the problem. But coming from the sales side, you’re trying to resolve things, make things work, make things happen. But in my history of, of sales and marketing, they tended to get in the way we call them bumps in the road, you know, <laugh> to be successful in a partnership with, with a retailer and sell a lot of product, they, they could be bumps in the road. So coming from a different background I think was, uh, was an advantage. And, uh, and to your point now we’ll get to education later cuz we really are lacking. No one grows up to be a a returns person. <laugh>?
Scott Luton (03:30):
Not yet. Not yet. And there’s gonna be some Tony Sheroda Underoos out in the market. Yes. Before we know it. Okay. Well, I appreciate you sharing that. You know, that, that mind to create value, that mindset to create value and, and to fix things and to create, uh, happiness for all parties. Those are some of the things I hear as you were describing your start in this space. So before we dive into a lot more reverse logistics and returns, which to our listeners, those are not new phrases for you, right? Right. That’s been a growing area of importance across global business. And we’ve tried to elevate those conversations in partnership with Tony and all of his, uh, friends for the last couple years now. So folks that may know, that may also know Tony, you’re a big music fan, right? And you love as do many others, thousands, hundreds of thousands of others, jazz fest down in beautiful and historic New Orleans. So, question for you, two questions for you. What’s a couple of your reasons why you go back to Jazz Fest each year? Let’s start with that and then I’m gonna pick your brain on some of the bands you’d call.
Tony Sciarrotta (04:33):
Well, yes, it is a passion for me. And, and I think I’m approaching about 25 years of going there. And I love the fact that you call it Jazz fest. Most people do, and they think immediately like Miles Davis and Winton Marcellas. And it’s so much more than that. When you think about 10 stages, everything from gospel to blues, to old jazz, to new jazz, to Cajun music stage, urban music stage, it’s, it’s legendary. And, and I also love Scott. You know, there’s a number of music festivals around the country and concerts to go to, but the average age of many of them tends to be in the low twenties. The average age of people who come to Jazz fest from all over the world is probably in the mid forties.
Scott Luton (05:19):
Okay. So
Tony Sciarrotta (05:20):
That means it’s a little more mature crowd that really lo goes to there for the music, not for whatever other reasons people have done
Scott Luton (05:28):
<laugh>,
Tony Sciarrotta (05:29):
You know, and, and, and the idea that you go from 11:00 AM to 7:00 PM and then in the evening you go hear more shows. And some of the artists who are there, you know, Stevie Wonder played at the Royal Sonesta Hotel Piano Lounge <laugh> one year. Wow. You know, how often is that gonna happen in, in your lifetime? You know, to, to see John Goodman get up on stage between, uh, you know, some of these artists and start to play play harmonica, you know, it’s, it’s just P Fountain. He got on stage with P Fountain <laugh>, you know, behind him, walked up behind, starts playing with. It’s just, it’s, it’s amazing. You know, you mentioned some of the names of who’s been there. It is a who’s who. But I gotta tell you, last year, uh, was the second time the who were at Jazz Fest, and they put on an unbelievable show, um, with a big local orchestra. Did a lot of bits from Tommy and Quadrophenia, just amazing. It’s always great to go see new and find those new artists like Gary Clark before he became famous as a blues player. Um, you know, or, or Marsha Ball has been doing it for 30 years. So there’s all kinds of, of people and, and I love discovering the new greatest latest and, and, and amazing musicians. That’s, that’s what makes it special. But thanks for asking it. It’s, you gotta get there one day, Scott. Y you just gotta get there.
Scott Luton (06:51):
Y hey, you, you’ve just made that become a bucket list item, how you described all that, and I bet to many of our listeners too. And you know, Tony, we’ve talked about Jazz fest, uh, on shows and, and kind of, uh, at lunches and stuff kind of behind the scenes. And I’ve always understood your passion for it. But man, it came out, you exuberantly spoke about Jazz Fest there, so we’re gonna definitely meet there in New Orleans soon. So we gotta, you, you’ve, you shared some of your famous acts. I wanna get into another big event. Right? And by all accounts, both first parties, third parties, industry observers biggest, and the best annual conference that the Reverse Logistics Association has put on, just took place a couple months ago. And y’all have got quite a track record there. Greg White and I both and other team members have been really honored to be a part of those in the past. But this past one, just from a couple months ago, seems like it, it took it to a whole new level. What’s a couple of key takeaways from this year’s event?
Tony Sciarrotta (07:49):
Oh, Scott, you’re so right. You know, the first one was in 2003, and there’s never been one as big as this. We had 830 registrations, people showing up, as you said, from all walks of life, wanting to do something about returns and making a difference. And, and that’s just so important. And this year, the key takeaways are, we covered a lot of ends of the spectrum. We had Becca Mines, who’s SVP of End-to-End Logistics at at Best Buy. And she was amazing. And she’s just so, also very passionate and you see a lot of passionate people in this space. And the other keynote was Nabi Nasser from the Remade Institute has been the father remanufacturing in other industries, not automotive, which has, you know, been going on forever. So there’s, there’s that end-to-end logistics, what do you do with the stuff? It’s becoming more of a circular economy. But we also did a couple cool things. We had the awards and we took them very serious this year. I even wore a tuxedo, Scott. I put it on to hand out the awards because it’s important to take it serious. And, uh, we had some great nominations, people who are very creative and innovative in this space, which we need. We also introduced the concept of the r l startup pitch. And, uh, we did a shark tank for startup companies in the r l space. I
Scott Luton (09:12):
Love that. That’s one of my favorite, I I hated to miss this year, but that was one of my favorite elements y’all have added. And I saw a lot of success, a lot of great news stories and voices as a part of that. That’s
Tony Sciarrotta (09:23):
Exactly the point. Scott. Um, 15 companies applied. We narrowed it down to about six. We had five people as judges from the industry, investors as well as people who are knowledgeable. And that was so well received. And so I’d say that the, the key takeaways are people are making a difference now. People are paying attention. It used to be the joke Scott used to be, you’d ask a company who’s in charge of your returns and they’d never know, or the question of what do you do with your returns? And nobody ever really knew. And now there’s more attention being paid. So the, the takeaway is there’s more attention than ever. And finding ways to make a difference. And the fight, Scott, you know, I’m, I’m a big believer in, in content. Uh, you and I love to share good content about how we can make a difference in the industry.
Tony Sciarrotta (10:14):
And you always find the best speakers to talk about, you know, high level ideas. So content fights with networking, right? <laugh>, see you’re here in Las Vegas and, and you’re only there for three days and, and you wanna meet everybody, but you wanna hear great material. It, it’s just the constant battle we actually learned to reduce the number of sessions. Give people a little more time to connect. But the real takeaway is the r l pitch competition, uh, was a big one. The awards, and by the way, we did that cell phones for soldiers Charity top golf. Yep. And we doubled the amount of money we’re, we’re approaching $25,000 in, in charity donations. That’s awesome. And I’m very proud of that. And, you know, that’s one of our local, uh, charities as well. Such a great story. You’ve heard it. Again, the key takeaway is there are really smart people in this industry. Go listen to ’em, go talk to them. Yeah,
Scott Luton (11:04):
I love that the picture you paint there, where, where you’re, you’re, uh, broadening the tent, uh, for all folks from all different walks of life. Functional areas, sectors to meet others, exchange market intel, exchange ideas to network, but then also to serve, you know, serving the startup community, which of course we hold near, near and dear here to serve charities, especially, uh, charitable efforts for our fellow veterans, which we’re very passionate about. And then, of course, how folks can connect and no telling. I’ll tell you one of these days, Tony, you are gonna have to do a debrief on the months that follow the event. Cause I bet there’s a lot big outcomes that are, um, kind of under the surface level. Yes. That probably started with, with sidebar conversations at the, uh, RLA conference.
Tony Sciarrotta (11:48):
Absolutely true. And those are the biggest testimonials we get. And the biggest compliments about that afterwards, people like yourselves are recognizing that reverse is about returns. It’s about customer satisfaction, it’s about media expectations.
Scott Luton (12:03):
Let’s go broader here, right? For far too long, the reverse space, the return space it has, unfortunately, but under the radar, right? And it’s not been a priority for way too long. And, and, and you, thanks to your leadership, your team’s leadership, many folks on your board, and of course what we’re trying to do, we see that slowly, not, not fast enough, but still it’s, it’s slowly changing. So when you look at it global industry, right? What has been one of the coolest developments that you’ve seen in the returns reverse space so far here in 2023?
Tony Sciarrotta (12:36):
Well, there’s, there’s a couple of major developments going on. One is a business development that we should talk about. And the other is coolest in terms of the software that’s now out there, Scott, so that these return products can be dispositioned. So a scan of the U P C by the system immediately searches the internet. What’s the value of that product in the secondary market?
Scott Luton (13:03):
Okay. And
Tony Sciarrotta (13:03):
It helps make a business decision. What do you do with this return? Do you liquidate it? Do you resell it into the secondary market? Do you sell it on your own website? Do you develop special business channels for these goods? It really, really has made the difference in that area. Now that software also provides interesting business developments because we’re talking now about seismic shifts in the industry. And a seismic shift would be that these products are starting to be identified as frequent returners. And let’s talk about, you know, the big kahuna who’s now putting a badge on some products on their website saying frequently returned. That’s seismic. Right? Right. It’s huge. And around the world, you’ve also started to see major retailers, Zara comes to mind that are charging now for returns limited. It’s, it’s like a little leak in the dam, but the dam’s gonna break <laugh> because we can’t afford it anymore. Right. It’s just too costly and it’s a supply chain issue as well as others to cost the moving this stuff. So to see seismic shifting and, you know, let’s recognize the big kahuna is even announced a, a charge for returns. Yes. If they’re not dropped off at certain retailers and they’re dropped off at another place, then there’s a slight charge.
Scott Luton (14:31):
And, and hey, just a level set with our listeners when, when Tony says the big kahuna, and we can put it out there cause it’s public knowledge. That’s of course Amazon, uh, as we all know Tony, and it sounds so cliche by me saying it, but I think it’s really important just for precedents, they change the whole game. Yes. Right. When it comes to not just e-commerce, but also how returns were handled in as a byproduct, how much more work and resources went into reverse logistics and returns management. And so Tony, I’m not putting any words in your mouth, but as they change their policy, uh, as you kind of implied, that’s gonna have a big ripple effect to others, their competitors that have been, you know, trying to keep up with their policies for so long. And the beautiful part here, I believe, and I think, and Antonio, I’d love to get your take here. Cause I think we’re gonna see a lot more tightening in this space where consumers will have more skin in the game. But that will allow our industry, it’ll give it more leeway to make some of those big sustainable or or permanent gains when it comes to, to sustainability. Right?
Tony Sciarrotta (15:34):
Absolutely. And, and, uh, it’s challenging, Scott, because you make it easy to return and people do. Right. You know, and, and that’s, that’s just a byproduct. So it’s, we’ve created that culture of entitlement. So people, overorder it’s a given. People order what they don’t need, they overorder because they want to touch it, they want to feel it, they wanna see it up close and then make a decision, right? So they did lean on these easy return policies and now it’s gotten very costly. And the other factor, as you said, related to sustainability is what happens with all of this stuff. You know, if you think about it, Scott, we had a major supply chain hiccup last year, major. We also had nearly a trillion dollars of return goods that was not available for sale because it was somewhere in the returns world. And, and you think about that, that’s a trillion dollars worth of retail sales stolen because people were sitting on three or four sweaters and, and, you know, just to try different colors and sizes.
Tony Sciarrotta (16:39):
So now you’re talking about what do you really need? Not just what do you want to sample and take a look at at home? But that’s, that’s the core of circularity. And Scott, we’ve made this joke before. I’ve been accused of being anti-capitalist because I wanna slow down the returns. And, and for some people it’s like, well, no, that’s their bread and butter. Well, no, let’s, there’ll be plenty of returns no matter what. But if we could really focus on that major supply chain hiccup, part of it was, was factored because people had so much inventory in transit, right? In somebody’s home on the way back in a return center that could have been sold as new to somebody else. The impact is being recognized in so many ways. Now, as you know, I mean, you, you’ve talked about the supply chain hiccups for so long that we forget about this factor of it.
Tony Sciarrotta (17:30):
And that’s a, that’s a big challenge that’s out there, that’s now being addressed. In fact, it’s on the peripheral still, Scott, some other cool things like you can know with your systems that you’re getting something back and you might have another customer for it and you can short circuit that whole process. Now there’s some risk of, is that product gonna still be like new? And there’s, there’s some of that, but it’s still a cool opportunity to just directly go from a return into someone else’s hands, right? That’s gonna take a while. But they’re getting there. And the other cool one that we haven’t seen enough of yet, Scott, that avatar concept of what’s your body type and will these things fit you? Hmm. You know, there’s that challenge. How do you get something in the apparel industry of the shoes industry? How are you gonna know that that’s gonna comfortably fit you? And so these avatar softwares are being developed and they’ve got a ways to go. But they’re cool. Scott, when they happen <laugh>, they’ll be very cool. But we’ve got a ways to go.
Scott Luton (18:33):
Well, we can all appreciate that cause we have a lot more heavy lifting. However, I’m a big believer that we gotta celebrate the wins. And we have come so far it feels like in the last several years, maybe a lot longer. And, you know, we love cool, good news here. There’s a lot more startup plays in the reverse space. I love that there’s a lot more new technologies developed specifically for the returns and reverse space. I love that. Obviously policies are changing, including from some of the biggest movers and shakers that have that big ripple effect across industry. I, for one, really appreciate that cause of what that’s going to enable. And finally, uh, and, and you shared many more than this, but the, the behaviors that we’ve tolerated, encouraged is probably a better word. Yeah. Encouraged for a long time. Those are gonna be changing.
Scott Luton (19:21):
And, and you know, as consumers, and we’re, we’re gonna talk about this here next, we’re all consumers, right? We all have to be more responsible cause lay a big role in global supply chain. And if we want it on the sustainability side and, and the e s g side and, and to protect our our planet, man, a lot of that starts with decisions we make day in and day out Yep. As consumers. So, um, alright, so you got me excited, Tony, I love what you bring to the table. Let’s talk about a challenge from Tony Sheroda, right? A challenge from Tony Sheroda. I’m gonna go back to my go-to here, Tony. You know the Waldorf Astoria up in New York City, right? Yeah. Big gorgeous banquet room, let’s say Tony sh wrote is keying like you do oftentimes, and you’ve got the captive attention in this big old room of the world’s biggest, most robust companies. And your big thrust is you, as you give your keynote, is you wanna challenge these business leaders to think about reverse logistics and returns management much differently. What would that challenge look and sound like, Tony?
Tony Sciarrotta (20:28):
Well, there’s so many ways to go on this, Scott, but I think the first thing I’d do is I’d ask ’em to raise their hands. Those leaders who have companies who have someone in charge of returns at the VP level. Hmm. Honestly, it should be at the C-suite level, but let’s just settle for the returns. Vice presidents reverse logistics. I’ll betcha if there’s 500 leaders in the room, you might get 20 maybe and I only know of five vice presidents of returns and reverse logistics. So that’s, that’s where it’s gotta start. Take it seriously and recognize that it’s not just about losing money on returns, it’s about losing customers. And if you hit ’em on the head with that, that customers return 75% of the time because of unmet expectations. So if you want customer loyalty, if you want that customer to keep coming back to you, make him happy. Give them what they need more than what they want. Give them what they need and overdeliver. Hmm. So put someone in charge, you know, put your hands up if you’ve got a vice president and then put your hands down unless you have a sea level person and then the room’s empty. Right? <laugh> Scott, cuz nobody’s, I I have not found a sea level person there.
Scott Luton (21:51):
Not yet.
Tony Sciarrotta (21:52):
Thank you, Scott. That’s exactly the way I would challenge those leaders. Not yet. Who’s gonna be first? We do have a, um, head of circular economy at Cisco. Our old friend Jack Allen, who was one of your first guests with us, right?
Scott Luton (22:05):
Oh, Jack’s awesome. Jack is awesome,
Tony Sciarrotta (22:08):
But I don’t know if you sea level yet. We gotta get him there somehow. We gotta get him officially sea level, but that it’s that easy. Put somebody in charge. And of course that challenge too, Scott, back to the education thing in a few minutes, is how do you put someone in charge if they don’t have the experience? And we already said if they come out of finance and service, that’s not the ideal person to run a a returns group of reverse logistics group. But I, I think that’s the challenge I put out there. Make your customers happy so that they keep the stuff and put somebody in charge of returns to make them happy and make it flow easily. So love it. Um, that’s the challenge.
Scott Luton (22:47):
I love it. And beyond that, I mean, we’re seeing successful returns and reverse policies and approaches create revenue like you were speaking to earlier. That’s a, uh, just, it adds to the value prop. Why bring folks into, you know, get ’em at the leadership table so there’s more visibility and purpose and results and action. The equation is certainly tipped in your favor. Tony, let’s get back to this consumer’s thing. Yeah. A few weeks ago, by the time this interview publishes, and again, this is just my opinion, and Tony, if you don’t agree with me, by all means, but my opinion as both a practitioner and a consumer, you know, here in the modern era of e-commerce, it’s been what I call the responsibility free era for consumers. These returns policies have evolved to be so easy, but also that required no responsibility. I mean, the condition that these products come back in, um, how often things are able to be returned. And, and, you know, all this has led to Tony, what industry and supply chain and business leaders have been fighting through is this tidal wave of returns that is not only bad operationally and resource wise, but but really bad and, and counter prevailing for the sustainability gains we’ve been trying to make that consumers also want. So speak to the how and why reverse those, the why should consumers find more ways to reduce their returns and how can they do that? Tony? Well,
Tony Sciarrotta (24:21):
Scott, it, I think they used the expression once, but I can use it again. The genie is out of the bottle. We have built this culture of entitlement
Tony Sciarrotta (24:31):
And, and the wave of e-commerce growth because of the pandemic really drove that, spiked it on steroids that it shouldn’t have happened. And by the way, not just in the past, but even in certain countries, the cultural differences are amazing. Hmm. In our country, we’ve created the entitled consumer e-commerce, as we all say, and know it’s, it’s 25 to 35% return rates. It’s easily 50% plus for apparel. So consumers are doing it because it’s easy. However, you take a country like Japan, 200 million people, e-commerce is big. Their return rates with e-commerce is estimated around 1%. One, that’s a single digit <laugh>, not 25 to 35%. That’s a culture variance. Hmm. And, and even Asia in general, returns are far less because part of the culture, and this is also true in the Middle East, the culture is focused on if you buy something that you don’t want, it’s an insult to take it back.
Tony Sciarrotta (25:41):
Hmm. That’s a culture shift. And, and we don’t have anything like that culture here, but that culture is the, the standard in, in other countries. So not so much Europe, Europe’s tending to follow our lead now and Europe’s a little more challenging. But in general, it’s, it’s the culture of entitlement that you create when you make it fast and easy for a consumer and you don’t penalize ’em. Now the penalty starts with a $1 charge for dropping something off or a $2 charge for sending something back versus dropping off at a store. So there’s, there’s small incremental changes. But will that slow it down? Yes, it might. It’ll at least have an impression. People won’t recognize the number, they’ll just think, oh, it’s not as easy as it used to be. Okay. So that’s a start. And consumers though, they don’t have enough tools when they go shopping online, the tools, Scott, you know what we’re talking about. It’s not just the size and the fit. It’s that two-dimensional experience that we have gotten so used to, but we don’t like it. At the end of the day, you and I would much rather be sitting down at lunch talking to each other, shaking hands than to do this on Zoom <laugh>. But the culture is forced it and that just the culture, but the, the, the changes. So the consumers want to do the right thing, but it’s too easy to do the wrong thing. <laugh>.
Scott Luton (27:11):
Yes.
Tony Sciarrotta (27:12):
So yes. So there’s, there’s a little in the armor again, in that some e-commerce retailers are tracking consumers who are belligerently returning excessive amounts and they’re putting ’em on a watch list or a blacklist and you don’t hear about this. Who wants to go public with that information? <laugh>, um, that you’re, you know, you’re stopping some customers from buying stuff from you because they’re over the top on their returns and they’re costing you more money.
Scott Luton (27:42):
I can, I can see the legal commercials, uh, <laugh> down this angle already. <laugh>. Yeah.
Tony Sciarrotta (27:48):
And so you have to be very careful about how you do that. But consumers should find ways to buy things better. But that takes time, Scott. And time is is one of the most precious commodities, uh, for most of us in this country. Certainly we, we think our time is so valuable. We don’t wanna spend time looking at the reviews of a given product. Right. And you know, Scott, I tend to look at the worst reviews Sure. As well as the best. But I look right away at the one stars and see if I understand why it was a one star. And, and you can get some ideas from that, but have consumers got the time to do this? Not so much. It’s different when you go in a store and you’re walking up and down the aisles and, and you’re just, it’s, it’s, it’s a three-dimensional experience.
Tony Sciarrotta (28:38):
This two-dimensional experience of shopping online is challenging. A again, there’s no way to know how it’s gonna feel or how it’s gonna fit until it’s actually in your home. And this is not just clothing, this is everything. Sure. Appliances, electronics, small appliances. And of course the other side of it is the marketing aspect. Marketing it, it was one of the reasons we learned at Phillips that products were being returned. They’re being over marketed. People are promising that these things will do something like cure, sleep, insomnia, and do all these magical things that they simply don’t do. And now we’ve enabled them to say, no, I’m not gonna put up with this. It doesn’t do what I thought it would or what you told me it would. I’m sending it back. So there’s a combination of consumers want to do the right thing, but it takes time.
Tony Sciarrotta (29:30):
And ultimately do consumers see the difference? It makes, it’s a challenge to see it, right, Scott? Yes. Um, you know, it’s like filling up your recycle bin in the backyard. Uh, in our case we tend to fill the recycle bin more than we fill the trash bin <laugh>. But you know, it, and, and it’s like you feel good about yourself maybe, but at the end of the day, is that stuff being really recycled or not? You know, it’s kinda that. But consumers can they find a way to reduce their returns? Absolutely. If they can give it a little more time. And that’s, that’s the challenge. What’s your time worth versus how easy is it to send it back if it’s not what you want? Mm-hmm. <affirmative>. And you’ve gotta change the culture of the e-commerce retailers. And, and I think I can say their name as well, the, uh, the shoe company, Zappos, I mean they, they have no qualms about making returns available for a year after you buy a pair of shoes.
Tony Sciarrotta (30:29):
That’s that culture of entitlement. Right? So now every other e-commerce retailer is like, I gotta compete with that. So it, it’s, the challenge is consumers might wanna do the right thing. You know, Scott, it’s like going to the grocery store and you see the organic versus the non-organic. Hmm. And, and there’s a, there’s a price differential, right? Organic’s usually more expensive, but it’s healthier. So as that, as that gap closes, people will lean more towards organic, healthier things. And the same for shopping online. As it becomes less easy to return, people will find ways to buy what they really think they want. Yeah. And so that’s, that’s the slow way to change the culture cuz you know, you talked about some of the successes that have happened, uh, some of the improvements in supply chain that have happened. And yes, we’re grateful for all those successes, but we’ve got the return side is the back end. Right. It takes a little longer to catch up. Uh, and, and get the consumers to recognize that. By the way, some other cool things about consumers, Scott, they’re taking to that secondary market in some cases like fish to water. Sure. Right?
Scott Luton (31:40):
Yeah. The re economy, right? It’s blowing up
Tony Sciarrotta (31:43):
The, uh, vintage clothing, the pre-owned Nike, uh, jordanaires that you can get for half the price cuz they’ve been gently used or they’ve cleaned them up. So, and, and those products actually get return less Scott. Yeah. It’s, it’s crazy. But people in that value market, we see Goodwill stores are doing better, the secondary market. Other retailers are doing well, they’re growing because the second generations millennials and so on, they’re okay with this vintage stuff and they return it less because they know they already got a deal. They’re not gonna worry about returning it. They’re just happy to get a deal on a Columbia jacket for half the price that sells into store, but, and they’re getting it from Columbia so they feel a little safer and more secure. So that’s another way to reduce returns is, is do something like that with it because it will make a difference. Again, we were kidding about, uh, it sounds anti capitalistic, right? You might sell less, but you might build better loyalty with your customers. And I think at the end of the day, returns are about something went wrong in the experience. That’s, that’s the bottom line. Something went wrong in that customer experience that they chose to return something. Yep. At the end of the day, returns are partly consumer responsibility, but they need help from the retailers and the manufacturers. I’m sorry, you know, I’m preaching to the choir sometimes, but, uh,
Scott Luton (33:10):
No, we, we all need to hear it more often because not enough is being done in my view, driven by the consumer to help make progress, be made more impactfully and frankly faster. And so to our listeners out there, hey, me and Tony aren’t meaning to preach to our listeners, but, and, and you know, Tony, I don’t know about you. I point the finger at myself and, and my family and we look, we look to, you know, start at home first, but everyone really wants to be part of solution. We see more and more figures and polling and, and research data around the purchase side. And what I’m hoping we see more gains on is on the the decision side, right? Where folks, to your point, hopefully folks are gonna do more homework and spend a little more time deliberately to make sure they get what they want so that they can help not add to the tidal wave of products.
Scott Luton (34:02):
Right. And you know, Tony, one more thing. This just becomes a soap box I think for both of us as we, as we get together. I see dear friends on my social feed, uh, especially folks that may not have ever been in in global supply chain and, and I’m gonna pick on these folks just for a second. So of course gains are being made from a boxing material standpoint so that you can right size that, right? Yes. Uh, James Mallally, it’s one entrepreneur comes to mind. Lots of folks are doing great things there and we gotta get better. However, again, since Tony and I are talking consumers and we’re all consumers and we all play a role, whether we like it or not, please don’t be that person. Please don’t be that person that buys batteries for your your garage door opener. Right. And places that one order and have to get it next day from an Amazon. You’re only gonna increase your chances of getting that really tiny battery pack in a box with lots of stuffing when you probably could drive down the road and get it from Home Depot or at least, at least get it in a few days. Tony said just me, that that drive it drives me crazy when I see that, Tony, your thoughts.
Tony Sciarrotta (35:09):
Absolutely. Scott. And uh, and, and that that can lead to dissatisfaction cuz your expectations are higher. When you, uh, and I I heard this story yesterday, a colleague of mine, a neighbor who ordered a a, a dog collar thing, he ordered at 10 30 in the morning, it was delivered to his house one o’clock in the afternoon for $39. And I’m listening to that and I’m saying, Scott, that that is not economically feasible. Right? But see, the, the race is how can you over-deliver on delivery rather than making sure they get what they want and what they need. Yes. When they really need it. Now let’s, let’s at least acknowledge again, they’re the big guys and Amazon shows you on the website when you order something to be delivered, they talk about, I think it’s Tuesday, Amazon shipping
Scott Luton (35:59):
Amazon Day. Yeah.
Tony Sciarrotta (36:00):
Yeah. Sh combine your packages, we’ll deliver ’em all on one day. Yep. And and that’s at least a start. We need more to do like that. And they will, they, they’re gonna follow. Yes. Because it’s an e-commerce, uh, you know, giant. And why not follow ’em just like the badges of, uh, frequently returned goods <laugh>. So, um, so that, that, that will come Scott. Um, it’s gonna take time, like you said, but at least, uh, there’s some attempt. But you’re gonna set these expectations of having the delivery you needed for your, uh, smoke detector, for a battery, um, to be there that afternoon. Why check the box says, let’s deliver it all at once, you know? Right.
Scott Luton (36:42):
Please. So as we finish this segment and come down to home stretch, we’re gonna talk talent before we, uh, we wrap up here with Tony. But hey, please start with awareness. Start with, uh, understanding the massive challenge that global supply chains and, and organizations and their teams are hit with in terms of returns. Start with that awareness and then Tony just shared a variety of ways you can take simple steps at playing a role in, in bringing that tidal wave down to maybe eventually maybe a little ripple. We’ll see Tony, we’ll see how fast we can get there. Let’s shift gears to talk talent. I loved how you shared your story on the front end about how you were tapped on the shoulder and voluntold maybe as a, as a, as a a phrase I like using and did big things at Phillips, right? Without that pedigreed or degreed, you know, reverse or returns background, right? You jumped in, wanted to bring, create value, solve problems, drive innovation, tackle, you know, returns challenges. And I think there’s a lot more opportunities for that. However, as much as we can do that, to your point earlier about creating a real pipeline from programs that focus on returns, management, reverse logistics, that’s also a big opportunity. So speak to that. What needs to happen to increase this very focused returns and reverse pipeline?
Tony Sciarrotta (38:02):
Well, Scott, we, we’ve known each other at, what, four years, so at least almost five years. And there’s no other school offering a degree yet in reverse logistics, <laugh>, outside of American Public University that some people don’t consider a serious university, although it’s funded by the government for our veterans and our military returners and so on. There’s not enough education there. And it bothered me and I, we have a number of academics in the association and I’ve asked them, I said, why aren’t there more? And they said, and this is horrible business dictates that universities are measured by their graduates and they’re starting salaries and there’s not enough high demand in those positions in the business world to say if you got a degree in rev reverse logistics, you’d have a starting salary of $125,000. And, and that’s what the universities are forced to measure themselves by, how their graduates rates are and how much those graduates get when they get done with school.
Tony Sciarrotta (39:04):
And, and that’s the brick wall I ran into recognizing, yeah, there’s not much we can do about that yet. But, but very proud to say that we are in the process of developing relationships with Georgia Tech, American Public University, Auburn Remade Institute to offer courses through our pipeline because people do come to us looking for that. So what we’ll do is selectively talk to, uh, Georgia Tech and say, okay, you have a class on forecasting returns as part of your supply chain. Let’s take that piece and put it into the L community, make it available, you know, $500 for the 16 hours, whatever it is. But let’s, let’s do that. So we are in the process right now of developing that pipeline. Uh, we wanted to connect to these different people. Uh, remade has already worked with us on it because, and honestly, Georgia Tech remade American Public University, it’s still complicated to go to school and do all that stuff. Sure,
Scott Luton (40:06):
Yeah.
Tony Sciarrotta (40:07):
And so if we can offer those classes that are relevant, then people working in this space at various companies will have an opportunity to take just that class rather than go back to school for another degree. And certainly they don’t want that. And, and by the way, it, it is our responsibility, it is the reverse logistics association responsibility to drive this. And you know, from your background between C S C M P and A S C M, they offer these certification programs that’s all focused on forward. They do not have certifications for reverse. None of them
Scott Luton (40:44):
Big opportunity. We gotta address it.
Tony Sciarrotta (40:46):
Exactly. So with some extra resources later this year, Scott, we have hopes of really delivering a strong curriculum of courses between forecasting, how can you reduce returns, what do you do with them, and how do you get the highest asset recovery? Those are, those are classes that need to be out there. And I’m proud to tell you, remade already has at least five or six classes. We just have to figure out how to build that, you know, the, the highway to connect us to them. And that’s the technical stuff I don’t know much about, but someone else does.
Scott Luton (41:21):
But it’s gonna ha the need, the need and the, and the imperative for our industry and, and how we meet the demands, the growing demands of the modern day consumer on demanding sustainability, demanding on protecting our, our planet, which I love. Yes, we can use that, right? To develop the talent and the know-how and the technologies so that we can tackle returns. Not only returns, I’ll defer to the expert here. The returns is kinda reactive side, but going upstream, as you mentioned, circularity, so we can plan for more circularity as we develop products that will give us better options, more appealing options as they get to the lifecycle.
Tony Sciarrotta (42:02):
Right? Exactly. Reuse is, is way better than recycling. Unfortunately, I’ve learned from my recycler community that it’s more expensive to make something out of recycled products than it is to use new, um, virgin products, uh, virgin resources. And we have to change that balance, Scott, right? Um, when it’s cheaper to make new plastic versus recycling old plastic, that’s, that’s a disconnect that why would they recycle plastic. But as it comes closer, we’ll see that improve too. But our L education, so what we wanna do, Scott, is we wanna be that place where the next time they tap somebody like Tony Shero on the shoulder and say, go learn about returns and fix it, then they’re gonna be like, oh, there’s this website with classes, I can learn something. So we’re really excited about that. And, and Scott, I can promise your community it will happen this year.
Scott Luton (43:00):
Awesome. And, and
Tony Sciarrotta (43:01):
I’m very, very proud of that, man,
Scott Luton (43:04):
Tony, that is great news. It’s, uh, great for interested parties that want a career. It’s great for, for those volunteer professional volunteers that get tasked with this stuff. And perhaps the best is, is is really good and great for industry and it’s gonna help us move forward, which we gotta do. Yes. We gotta find ways of making bigger gains. So, hey Tony rda, I really enjoy not only your friendship, but I enjoy your leadership, uh, of what you’re doing in this underappreciated under-recognized part of global business. We’re gonna play our part, continue to get the word out there and, and hopefully really wage the war when it comes to the awareness battle, which, which it is very real and palpable. Big thanks to your team too, who don’t get enough credit, um, you know, the ones that come out and create these learning opportunities, create the, the conferences, and, and, and by doing so, they create conversations that will drive change inevitably sooner rather than later. So big thanks to Tony Sheroda, exec director with the Reverse Logistics Association. Tony, we gotta do this again soon. Yeah,
Tony Sciarrotta (44:09):
We will. And um, Scott, we are doing it in Amsterdam, June 13th and 14th, the RLA EMEA Summit. We actually have people from the Middle East and Africa joining us in Amsterdam. So that’s happening. Uh, we returned to Atlanta in September with a leadership summit focused on, you know, developing more of these initiatives. So that’s happening. And everything that we talked about, Scott, because we’re an association, if they simply go to rla.org, they can find a lot of this information, rla.org. And I’m on there somewhere along with my board and the management team. Our emails are there, they can spend hours there learning a lot, even with, without the courses being featured there yet. So I’d encourage any of, of your community, and again, appreciate your community is paying attention to this. And, and Scott, again, you’re one of the only voices out there in, in this, uh, livestream area that’s giving this information to people on a regular basis. And what I look forward to, Scott, is later this year, we need to find some new industry thought leaders, right? We you bet. We’ve, we’ve had all of the great ones. Um, now we have to find some new great ones and, and, uh, we’ve got some coming, Scott,
Scott Luton (45:29):
That’s always a challenge, correct. Not just finding, but empowering new voices that will, uh, drive new change, uh, and new ideas in the industry. So I love that. Tony Schroder folks rla.org. You can check out Tony, friends, board members opportunities and, and even chat music really in a savvy way, uh, with Tony Sheroda, with r l a. Tony, thank you so much for joining us here today. As always.
Tony Sciarrotta (45:54):
Thank you, Scott. It’s always great with you.
Scott Luton (45:56):
All right, folks, to our listeners out there, our viewers out there, all of our global community members, hey, thank you for being a part of this conversation. I hope you enjoyed this conversation, uh, as much as I have. It’s all about, man, when we, when we talk about the phrase of deeds, not words, there are so many opportunities day in and day out for all of us as consumers and as practitioners to do something about this challenge, right? It’s not everyone else’s responsibility, we’ve gotta own it. So, hey, with that said, Scott Luon challenging all of our listeners out there. Do good, give forward, be the change that’s needed. And with that said, we’ll see you next time, right back here at Supply Chain now. Thanks everybody.
Intro/Outro (46:35):
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