Bb7584 management research_project

BB7584 Management Research Project
Kingston University
A study to optimize the
process of Reverse Logistics
in e-Commerce Industry
Presented By Pragnya P Sahoo- K1359395
Presented to Supervisor-Dr. Benjamin Laker
[Word Count – 12261 [Excluding Table of Contents,Abtract,
acknowledgment,References, tables, Appendixes]

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Contents
Abstract........................................................................................................................................................................................................4
Acknowledgment....................................................................................................................................................................................5
List of Abbreviations............................................................................................................................................................................6
List of Figures...........................................................................................................................................................................................7
1. Chapter-1 Introduction........................................................................................................................................................8
2. Chapter-2 Research Aim and Objectives...................................................................................................................9
2.1 Research Background...........................................................................................................................................................9
2.2 Objectives of the research:.................................................................................................................................................9
3. Chapter-3- Literature Review.......................................................................................................................................10
3.1 Logistics in ecommerce.....................................................................................................................................................10
3.2 Supply chain Management..............................................................................................................................................11
3.3 Reverse Logistics at a glance.........................................................................................................................................12
3.4 Reverse Logistics-Definition..........................................................................................................................................13
3.5 Dimensions of Reverse Logistics.................................................................................................................................14
3.6 Reverse Logistics – A strategic tool...........................................................................................................................15
3.7 Reverse logistics model- A stakeholder approach...........................................................................................15
3.7.1 External pressures.....................................................................................................................................................15
3.7.2 Organizational factors- The accessibility of resources........................................................................17
3.7.3 Individual factors- The strategic position of the decision maker..................................................17
3.8 Review of literature on theoretical developments ..........................................................................................18
3.9 Summary of literature review.......................................................................................................................................19
3.10 Critical Analysis of the literature review ..........................................................................................................20
4. Chapter-4 - Application of conceptual frameworks........................................................................................21
4.1 Why-drivers (receiver): Drivers in Reverse Logistics...................................................................................21
4.2 Why -reasons (sender): return reasons for Reverse Logistics.................................................................23
4.3 What: Types and characteristics of returned products.................................................................................26

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4.4 How: Reverse logistics processes...............................................................................................................................27
4.5 Product flow in reverse supply chain.......................................................................................................................28
4.6 The inverted pyramid........................................................................................................................................................29
4.7 A decision framework for Reverse Logistics .......................................................................................................31
5. Chapter-5- Research Methodology............................................................................................................................33
5.1 Research Philosophy..........................................................................................................................................................33
5.2 Secondary Research............................................................................................................................................................36
5.3 Primary Research.................................................................................................................................................................36
5.4 Quantitative Research........................................................................................................................................................36
5.5 Advantages of quantitative research........................................................................................................................37
5.6 Disadvantages of quantitative research.................................................................................................................37
5.7 Qualitative Research...........................................................................................................................................................38
5.8 Advantages of Qualitative methods...........................................................................................................................38
5.9 Disadvantages of Qualitative methods....................................................................................................................39
5.10 Data collection technique...........................................................................................................................................39
5.11 Interviews ............................................................................................................................................................................41
5.12 Survey.....................................................................................................................................................................................42
5.13 Observations.......................................................................................................................................................................42
6. Chapter-6: Data Analysis..................................................................................................................................................43
6.1 Quantitative Analysis .........................................................................................................................................................43
6.2 Qualitative Analysis.............................................................................................................................................................47
6.3 Analysis of the interview..................................................................................................................................................53
6.4 Analysis of the observation (participant) .............................................................................................................54
7. Chapter-7 Analytical findings and conclusion....................................................................................................56
7.1 Customer expectations and behavior.......................................................................................................................56
7.2 Company’s perception on RL.........................................................................................................................................56
7.3 Stakeholder’s take on RL..................................................................................................................................................57
7.4 Gap Analysis- between consumers expectations and company’s perception.................................57
7.4.1 The customer service gap model.......................................................................................................................57

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7.5 Conclusion.................................................................................................................................................................................60
8. Chapter-8 Limitation of the Research.................................................................................................................61
9. References.................................................................................................................................................................................62
10. Appendices...............................................................................................................................................................................65
Appendix-1 Chart-2- The biggest internet firms in each country. ....................................................................65
Appendix-2 Chart-3 The leading online retailers globally...................................................................................66
Appendix-4 Supply chain Management model..............................................................................................................68
Appendix-5 Interview Questionnaire..................................................................................................................................69
Appendix-6 Survey questionnaire.........................................................................................................................................70
Appendix-7 Survey results.........................................................................................................................................................72

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Abstract
Today, a large number of companies that offer products are undergoing returns; whether it is a
book from an online store, a TV to the electronic retailer or a apparel to a fashion retailer. How
companies manage these returns (reverse logistics) varies with the level of focus by each
company, because it is enormously tough to essentially make profits on reverse logistics.
This study focuses on various stakeholders to improve the implementation of RL. Furthermore,
the study discusses the internal operation of the company. For instance, the drivers of reverse
logistics, if they operate proactively or reactively and the efforts to recycle the products.
The primary data is collected from survey, semi-structured interview and observations
(participants).The data collected is qualitative and is analyzed on the basis of customer’s
expectations and behavior to that of the company’s perception. The secondary data was collected
from various literature, journals and books which were analyzed to review the study conducted on
optimizing the process of RL.
The data collected is analyzed and concluded that there is a gap between the customer’s
expectations and company’s perception. The analytical findings showed that the company’s gives
less significance to RL considering it as a burden. However there is always a room of improving
the process of RL which can begin by preventing returns by investing in technology.
Overall, the study depicts the companies are enforced to implement the RL systems by their
stakeholders to keep up the brand image and also the lack of alignment between the company
provision and the consumer’s service

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Acknowledgment
First of all, I would like to express my deep gratitude to my parents- Sri Banshidhar Sahoo andSmt
Premalata Sahoo and brother, Ritchie, without their unconditional love , understanding ,support,
patience and motivation , I would have never able to complete my MBA and this project. I also
extend my sincere thanks to my best friends, Trishna, Deepak and Rakesh who supported my
decision of taking this course and supported me through out.
I am highly grateful to my supervisor/professor, Dr. Benjamin Laker for guiding me throughout my
research and sharing his valuable feedback with my last minute changes. His valuable inputs for
structuring the project were commendable. I am thankful for his inputs which were essential to
complete this project.
I special thanks to Kent Springdal, who was always proactive in solving my queries in a wise
manner. I also thank him for providing me the extensions for my project. His support during the
course was immensely appreciable.
I am grateful to Anna E Ghebaru-Field and Rebecca Varma for providing with the support and
assistance during my course of study.
The experience of MBA would remain incomplete without the thanking Janice Chalmers for
enhancing my skills and tailoring my profile.
I further extend my gratitude to Mr.AnirudhBehera, V.P of IDBI Bank, India. Without the help from
this bank, I would have never been able to afford this course.
I am thankful to the all the professors of Kingston University for delivering valuable lectures
which has added value to my professional career.
Last, but not the least, I am highly grateful to my entire 2014 cohort for sharing experience,
inspiration and support.

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Listof Abbreviations
E-commerce Electronic Commerce
B2C Business –to – Consumer
B2B Business –to – Business
CRM Customer Relationship Management
CSM Customer Service Management
RL Reverse Logistics
FL Forward Logistics
CLM Council of Logistics Management
PRM Product Recovery Management
RLEC Reverse Logistics Educational Council
SERVQUAL Service Quality Gap Model

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Listof Figures
Figure-1 Forward and reverse logistics
process
Figure-2 Dimension of Reverse Logistics
Figure-3 Stakeholders' claims and firm's
responses
Figure -4 Research process Onion
Figure-5 Drivers in RL
Figure-6 Types of returns in RL
Figure-7- process in RL
Figure-8 product flow in RL in supply chain
Figure 9 the inverted pyramid for recovery
option
Figure-10 decision framework for Reverse
Logistics
Figure-11 Research process Onion
Figure-12 Interview structure-Source-
Adapted from Saunders (2003)
Figure-13 customer service gap model

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1. Chapter-1 Introduction
Ecommerce has given a global platform to its various stakeholders for trading. It has gotten the
contenders to the same level of business with a cut-throat competition. This industry has seen
tremendous growth in recent years from 1.5 trillion U.S dollars in 2015 , it is likely to cross 2
trillion U.S dollars in 2018(Graph-1). The main drivers of ecommerce development have been
the exploration for value and expediency; fast downloads; better shipping; simplified online
payment techniques; growing web accessibility and the shift toward smart phones and tablets
from laptops and desktops (Euromonitor, 2015). It has challenged the traditional shopping
trend and has drifted customers from supermarkets to internet shopping (WSJ, 2015).There
are mainly 2 forms of ecommerce; B2B (Business-to-Business) and B2C (Business-to-
Consumer).
B2B is also referred as e-biz is online exchange of services, products and information between
businesses. On the other hand, B2C is the business between companies to the private
consumers, also known as online shopping. It refers to online buying from bricks –and –
mortars retailers like wall-mart to pure-click online giant such as amazon. Around 41% of the
internet users worldwide purchase online. (Bloomberg, 2015). However, the online shopping
saturation rate varies from each country (Appendix-1).
The main element of internet retailer is logistics which is the backbone of the e-commerce
industries. With time and wide range of products, logistics have become the area of interest for
many companies. Initially companies worked on stabilizing the forward logistics to enhance
customer satisfaction but with time, the return rate started increasing and the term RL was
evolved. It was seen that 5 out of 12 customers return their products online (WSJ, 2014). The
company has a huge impact of these returns in terms of costs involved in transportations,
packaging and inventory. Handling the returns in RL is a need of the hour as it is a part of
customer service to effective handle their returns and provides them with alternative
products.
Reverse logistics is an area which has to be optimized to make it effective and could add value
to customer service and company’s revenue.

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2. Chapter-2 ResearchAimand Objectives
This chapter shows the aims and objectives of this research by discussing the background of the
research
2.1 ResearchBackground
Companies today cannot disregard the reverse flow of the products and the ways to handle it as
huge volumes of returns are increasing globally (Stock et al. 2002). Reverse logistics is a part of
returns management which in turn is a part of supply chain management (Mollenkopf and Closs,
2005). Activities concerning RL are often reactive in nature instead of proactive which implies
that, it is mostly an outcome of a consumer or downstream channel associate action and not a
outcome of a planning decision of an company (Tibben-Lembke and Rogers, 2002). However,
organizations can behave proactively to prevent/handle reverse flow. Proactive supervision of
products in the reverse flow can have positive impact on the organization (Langley et al. 2008).
2.2 Objectivesof theresearch:
The purpose of this research is to:
1. Identify various stakeholders in the reverse logistics and their pressure on the firms to
implant the RL system
2. Examine the complexity of reverse logistics system.
3. Discuss the frameworks and models used in reverse logistics
4. Examine the gap between consumer’s expectations and company’s perception in terms of
RL by using The customer service gap model
5. Provide recommendations for optimizing the process of reverse logistics to prevent returns

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3. Chapter-3-LiteratureReview
This Chapter describes the basic concepts of reverse logistics in ecommerce highlights
and discusses the research work of various authors and critically evaluates the gap
between the studies. The theoretical perspective of authors is identified during the
analysis of their research. A stakeholder analysis is also examined in this chapter. The
literature review is designed as recommended by Caulley (1992) of La Trobe University.
3.1 Logisticsin ecommerce
Logistics in ecommerce plays a vital role in delivering right products to the right customer
timely and efficiently. This effects the customer satisfaction to a greater level and impacts the
brand image of the company. There is a huge open war among the retailers to exceed customer
satisfaction by delivering best of services. Amazon assures one day delivery and this is a plus
point for the customers who cannot wait one day for their products. Ebay offers free /low cost
shipping for most of the products. Flipkart also offers low cost but speedy delivery. On the
other hand, Argos and curries offers the customers to click and collect form their stores.
Customers while making a purchase not only looks for best quality products but also expects a
hassle free delivery. An excellent product delivery system can not only help in retaining the
existing customers but also winning new customers. There are majorly 2 main types of
logistics; Forward logistics where the products/services flows from manufacturer to
consumers and reverse logistics where the products flows from consumers back to
manufacture (Figure-1)

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Figure-1 Forward and reverse logistics process
Logistics is a substance that has acknowledged additional attention and is extensively known by
the general public in the last 20 years. Transportation companies such as FedEx and DHL often
referred to as logistics establishments and their stressed on the overall logistics achievement.
During the nineties, the Persian Gulf War subsidized to the augmented recognition of logistics in
the US, due to CNN news critics’ repeated reference of the logistic challenges associated to the
7,000 mile long “supply pipe-line” to support the war in the Persian Gulf countries (Langley et al.
2008).
CSCMP (2012) state logistics as the practice of planning, implementing, and controlling measures
for the proficient and effective packing of goods, services, and its related data. This activity is
performed from the initial point to the point of consumption for the tenacity of imitating to
consumer necessities. Langley et al. (2008) asserted that logistics, in its simplest system, is added
inbound logistics to the outbound logistics of physical circulation of goods.
3.2 SupplychainManagement
“SCM is defined as the management of forward and reverse associations in order to deliver high
customer value at low cost to the entire supply chain process” (Christopher 1998). In 1997,

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(Cooper, Lambert et al. 1997) defined SCM by considering the 8 processes in supply chain
recognized by the International Centre for Competitive Excellence (now named Global Supply
Chain Forum): customer service management, demand management, customer relationship
management, eProcurement, product development and commercialization ,manufacturing flow
management, e-fulfilment and reverse logistics(Appendix-3)
3.3 ReverseLogisticsata glance
With increasing consumers in ecommerce industry, reverse logistics (RL) has been become a
segment which the manufacturers and retailers cannot overlook. Between 4% -30% of the
products are returned by consumers and the total returns are valued up to £6 billion per annum in
UK (Bernon and Cullen, 2007).However, managing these returns endures significant costs through
inventory, logistics and disposal and recycle, many of the organizations seem to employ inefficient
procedure for dealing with these returns. Considering the tightness of the budget in companies,
improvising the process of reverse logistics will have an impact on the overall company
performance. The RL also has an environmental impact due to the co2 emission from the
transportation. The companies majorly focus on providing best of customer services with great
quality products and price, emphasizing on the forward logistics (PR News, 2015).However, the
design and planning choices are essential to be measured with reverse logistics system(Seuring
and Muller 2008).
From 1980s to mid of 1990s, the scope of RL was restricted to the movement of materials against
the primary flow. With time, the definition was refined and new definitions started to emerge.
Rogers and Tibben-Lembke (1998) defined RL as ‘the process of planning, implementing and
controlling the efficient, cost effective flow of raw materials, in-process inventory, finished goods
and related information from the point of consumption to the point of origin for the purpose of
recapturing value, or proper disposal’. However, according to (De Brito and Dekker 2002), this
definition is still restricted, because several products are returned to a recovery point and not
their source. The RL Association state to the term reverse logistics ‘as all activity related with a
product/ service after the point of sale, the ultimate goal to optimize or make more efficient
aftermarket activity, thus saving money and environmental resources’ (Reverse Logistics

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Association, 2009). RL is a comprehensive zone and, in this particular study, we focused on the
management and prevention of retail returns.
3.4 ReverseLogistics-Definition
This section of the literature review offers and analyses RL and other associated theories.
In the mid of 1981, one of the initial definitions of RL was defined by Lambert and Stock, they
well-defined it as “going the wrong way on a one-way street because the great majority of
product shipments flow in one direction" (cited in Rogers and Tibben-Lembke, 2001, p. 129).
They acknowledged three hitches concerning the flow of products in the wrong direction in a
supply chain (cited in Pohlen and Farris II, 1992):
Many logistics systems are not equipped appropriately to manage the backward products
movement
The reverse distribution costs can be nearly nine times more than the forward flow.
The process and procedure of handling the returned goods are not same as that of the
products in the forward flow.
There are numerous definition of RL and there is a different attention in the different
classifications. Carter and Ellram (1998, p. 85) had an environmental emphasis and they
demarcated it as "the practice using which companies can become more ecologically proficient
through recycling, reusing, and reducing the quantity of resources used". In their definition,
the attention was on minimizing the environmental impact of logistics actions in the supply
chain.
According to Kokkinaki et al. (1999), RL comprises all the operations associated to the reuse of
resources. Another broad definition was given by Murphy and Poist (1989), and they defined it
as; “…the movement of goods from a consumer towards a producer in a channel of
distribution” (cited in Pohlen and Farris II, 1992, p. 36). Their research appeared because of
recycling which then had achieved boundless attention in RL. (Murphy, 1986) stated RL could
be the outcome of three causes:
 Initiatives from consumer, where the consumer returned imperfect products back to
the business
 Initiatives from industries where from industry can recycle products that are defective.
 Initiatives from government where the government sets regulations to recall products.

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3.5 Dimensionsof ReverseLogistics
To describe the various field activities of RL, Fleischmann et al.(1997) suggested an
morphology (Figure-2)
Figure -3 Dimensions of Reverse Logistics
The products which are the objects of RL activities can be distinguished based on used
products, packaging materials, warranty returns, production scrap and excess products.
From the model above, the time horizon could be either static, short term, medium or long
term which is likely to clash with the actors in planning horizon in RL process.
The motivation of any company to implement and improvise the process of RL can be cost
saving or other economic advantage, government regulation or creating a positive brand
image.
The company can adopt different kinds of process in RL such as reusing the products,
remanufacturing, recycling and disposing.

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3.6 ReverseLogistics – A strategictool
Formerly, RL was considered regarded as a cost Centre that was required to be controlled
and/or reduced/minimized (Langley et al. 2008). Moving further, the reverse flow was
observed as a segment that didn’t add any value to the organization, Rogers and Tibben-
Lembke (1999) recognized numerous companies where the RL was seen rigorously as a cost
Centre and because of that; costs of RL became more.
In addition to this, Mollenkopf and Closs (2005) also documented that RL earlier was not
noticed as a strategic tool but relatively as an essential cost for the business, a green “have to”
or a regulatory agreement. Additionally, they identify that effective RL practices can reduce the
consumer’s risk while purchasing products which can make a company more competitive
because the products can be returned effortlessly. The efficient process of handling the RL by
an organization in the supply chain will have a prevailing impact not only on the costs, but also
on revenue and consumer benevolence. Research conducted by Mermelstein (2006)
demonstrated that if the return management of product is appropriate then customers are
likely to shop more, and if the return management is bothersome, the shopping experience
would be annoying for the customers making them switch their choices (cited in Jack, Powers
and Skinner, 2010).
3.7 Reverse logisticsmodel-A stakeholder approach
3.7.1 Externalpressures
Stakeholder in an organization is an individual or a group who is affected by or can affect the
achievement of the organization goals and objective (Freeman, 1984). The sustainability and
success of a firm is significance association of its network of stakeholders ((Clarkson, 1995;
Post et al., 2002). Conferring to this, the manager is accountable for the management of all
stakeholders' entitlements and not only of the shareholders' benefit. It is the manager’s
obligation to organize the collection of complaisant and competitive interests (Hill and Jones,
1992). The literature on this perspective, RL has highlighted the significance of various
pressuring groups in the development process (Smith et al., 1997). The necessities of various

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stakeholders such as customers, suppliers, NGOs, governmental agencies and shareholders
(Guide and Van Wassenhove, 2001) can be seen as initiators of RL implementation. In other
words, stakeholders have numerous claims which the company can fulfill via RL
accomplishments. For example, consumers may claim long warranty periods, causing returns
and restoration activities. Recycling may gratify NGO's request for CSR. These illustrations
support the appropriateness of stakeholder concept for seizing the external forces which boost
RL. These concepts are clearly characterized in Figure-4. Stakeholders might accomplish their
claims through RL activities. Consequently, the first vital question is how companies recognize
and arrange various stakeholders. Mitchell et al. (1997), after an in-depth review of the
literature, established that the salience of an interest crowd depends on the manager's insight
of stakeholder characteristics: power, legitimacy and urgency. Thus, the disrepute of
stakeholders’ progresses as they obtain power, legitimacy and urgency, (Mitchell et al., 1997).
As a result, this study anticipates that, of stakeholder’s claims toward RL activities will have a
positive impact on the verdict of the company in embedding RL systems. Built on this logic, this
report presents the 1st hypothesis.
Hypothesis 1. The saliencestakeholder of RL hasa positive impact on the possibility of firms to
implant RL systems.
Figure-4 Stakeholders' claims and firm's responses.

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3.7.2 Organizationalfactors-Theaccessibilityof resources
In the previous segment, the study establishes the significance of stakeholders in RL, and how
their claims impact the companies to adopt RL systems. Nevertheless, the intensity of pressure
from the stakeholders is not adequate to influence the company to take explicit action
(Ullmann, 1985). Administrative and individual aspects might impact the final decision of
executing RL programs. Characteristics such as the distribution of resources to RL (Daugherty
et al., 2001) and the strategic attitude of the manager (Kopicki et al., 1993) are applicable in
the decision to execute RL activities. The accessibility of resources (Ullmann, 1985) is a key
structural factor that regulates the detection and effective application of corporate
opportunities. Commercial funds are dynamic for the improvement of RL systems. The
resources can be made available by accessing the organizational slack; the additional of
potential or definite resources which help an institute to overcome the external or internal
pressures (Bourgeois, 1981). This slack develops the company’s capability of environmental
adaptation (Meyer, 1982). Meanwhile, this also enhances the innovative capability of
companies (Cyert and March, 1963). The administrative slack perception seems
predominantly appropriate for RL. However, these systems need the company’s time, labor,
machinery, and material, exterior services along with latest technologies, transportation, and
IT systems. As a result, this study anticipates that as the company’s slack upsurges and the RL
resources are plentiful, the possibility of such activities to be executed accelerates. This idea is
represented by the subsequent hypothesis:
Hypothesis 2. The Organizational slack will havean affirmative impact on the possibility of
companies to implant the RL systems.
3.7.3 Individualfactors-Thestrategicpositionof thedecisionmaker
The study reflects an individual strategic inclination of the decision maker as in Fig. 1. The
Organizational tactical profile reveal the individual inclinations of senior management. As
managers exist in the strategic apexes of the company, their individual views are likely to
impact the strategic decisions of the company. In simple terms, the manager and the senior
manager of the company can have opposite strategic approaches. A manager with a liberal

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approach, standing at one side and the manager with a conventional attitude standing
approach. The liberal approach is categorized by dynamic exploration for the gratification of
stakeholders' claims, an enduring regulator of the environment, a constant quest for
competitive benefit and business opportunities, and low chance to risk. This approach is
related with practical array of conduct. In contrast, the conventional approach is related with
bigger antipathy to risk, an assurance to uphold the status and consequently with a responsive
array of conduct (Bantel and Jackson, 1989; Crant, 2000; Wiersema and Bantel, 1992).
Previous literature has recognized these polar deportments with respects to RL. Companies
with an inactive attitude will only execute the RL activities as a result of internal and external
pressures, which are difficult to avoid and lead to responsive implementation of RL programs
(Kopicki et al., 1993). A inactive attitude, in some companies, could be because of what Rogers
and Tibben-Lembke (1999) mentioned to as “management inattention”. On the other hand, a
proactive firm does not wait for unavoidable pressures before implementing RL systems
(Kopicki et al., 1993). Relatively, the decision maker leads on such type of activity. Based on
the above discussion, the study debates that managers with a liberal strategic attitude will be
more eager to implement RL. Obstinately, a manager with a conventional strategic attitude will
shun alterations and risks and, in turn, will be more implausible to board these activities. This
discussion is abridged in the third hypothesis:
Hypothesis 3. A liberal strategic attitude of the manager will have a positive impact on the
possibility of companies to implant RL systems.
3.8 Reviewof literatureon theoreticaldevelopments
In the early 1990s, the Council of Logistics Management (CLM) started emphasizing on RL and
published papers where RL was predictable as being significant to both society and company
(Stock, 1992). (Stock, 1998) described a detailed work on setting up procedure to carry out
the RL process. A couple of authors emphasized on reuse and recycling of returned products
((Kopicki et al., 1993).
In the mid of 1990s, Thierry et al. (1995) designed Product Recovery Management (PRM) by
examining various recovery options , differentiating ; 1)direct-re-use or re-sale;2) Product

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Recovery Management (recycling ;repair; cannibalization; refurbishing; remanufacturing); and
waste management (incineration and land filling). The writers illustrated the recovery
decisions rendering to the level of disassembly, and the worth essential as well as the
subsequent product.
Towards the end of the same year, Kostecki (1998) stressed on extending the life cycle of the
products and also discussed on the marketing aspects of reusing the products. The most recent
compilation on literature review focuses on either models or frameworks to support the
processes in RL or emphasizes on its business perspective (Guide and van Wassenhove, 2003,
Fleischmann et al., 199, and Dekker et al., 2003).
Recently, Philip Morris (Andriesse, 1999), Canon (Meijer, 1998) and Nortel Networks (Linton
and Jonhson, 2000) published articles on analysis of various practices in the process of RL.
Meyers (1999) and Rogers and Tibben-Lembke (1999) consulted a survey on logistics
managers and found that 4 out of 10 logistics managers ruminates RL relatively insignificant
compared to other issues in the company.
Parker (1996) has associated the reports of the First Annual International Congress on
Reverse Logistics Management that concentrated on the vital role of accounting for
environmental concerns. In the early 1997 in US, more than 450 billion lbs. of waste was
disposed which was just the benevolent municipal waste. Every year, chemical industries in
US, disposes various chemicals such as lead compounds, ammonia, chromium and carbon-
based diluters into the atmosphere, water and soil. Considering the environmental issues,
Amato (1999) provides a statistical data on the breadth of litter in US. He also mentions about
an "eco-industrial park" which is a power house of the company, a pharmaceuticals firm, a
wallboard manufacturer, and an oil refinery in Denmark, that broadcasts the concept recycling
and resource distribution.
Taking the volatility of market, few authors also focused on building tools that would calculate
the uncertainty and forecast the return (Nickel et al., 2012) which is even more critical when
working with closed supply chain due to increase in complexity and intensity of uncertainty.
3.9 Summaryof literaturereview

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At first, the various themes were presented to introduce the basic terms that was necessary to
continue the study, such as logistics and reverse logistics.
Moving further, various concepts on reverse logistics were presented which is the key focus of
this research. Different studies were analyzed which contained different views and focus
regarding reverse logistics. For instance, some literature had a more environmental focus,
others focused solely on economic factors.
3.10 CriticalAnalysisof theliteraturereview
Major study demonstrated optimizing the process of RL in ecommerce. In 1999, Stock
introduced methods to set up the procedure of RL. Kopicki in 1996 emphasized on recycling on
the returned products. Parker detailed study focused on environmental impacts caused due to
the transportation used in RL. Nickel in 2012 focused on making a tool to forecast the returns
considering the market volatility. New authors stated RL as a CSR which companies adopt as
its competitive edge. Analyzing the work of Nickel, it is difficult to forecast the consumer’s
reactions which are highly uncertain. When researches focused on why customers return
products, none of the study displayed ways of preventing returns. The stakeholder analysis
demonstrated the firms are enforced to implement RL systems. The various internal, external
and individual factors play a vital role in implementing the RL systems. However, it can be
concluded from the literature review that companies do not accept the RL and consider it as a
burden. Unless they equalize the significance of RL to that of FL, the system implemented will
not be impactful.

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4. Chapter-4 - Applicationof conceptualframeworks
This chapter explains the conceptual frameworks in reverse logistics and its process. It
explains the why what and how elements in RL.
After concisely introducing the concepts of Reverse Logistics, the following section discusses the
basics of Reverse Logistics by analyzing the subject from four crucial perspectives: why, what, how
and who. Previous studies have contended that these style of characteristics are relevant
significant to distinguish reverse logistics (Zhiquiang, 2003; Thierry, 1995; Fleischmann et al.,
1997).
In this section, we contemplate the following particulars:
• Why are things returned: The driving forces behind corporations to become dynamic in Reverse
Logistics, Why-drivers (receiver), and the causes for reverse flows (return reasons), i.e. Why-
reasons (sender);
• What is being returned: The product features which makes the product recovery striking or
essential.
• How Reverse Logistics is practiced: The different processes in reverse logistic systems are
discussed and focus on value recovery technique in the reverse chain (recovery decisions);
4.1 Why-drivers(receiver): Drivers in ReverseLogistics
The process of reverse logistics starts when the products move back in the supply chain or when
the products call for a value reclaims or recovery. In standard norms, there is a returning party,
who initially had the product and there is a receiving party, who is seeking to repair, recover,
redistribute or resell the product received from the returning party. In this part of the chapter, the
receiver’s perspective is identified which is called the driving forces for the businesses to develop
an attitude in accepting and accommodating returns.
The driving forces are categorized as: (Figure-5)

22
 Economic (Indirect and direct)
 Legislations
 Extended Responsibility
Figure-5 Drivers in RL
Economics – As a driving force, economics is related to all the recovery actions from which the
company can fetch the direct and indirect remunerations. However, even without clarity on
expected profits, a company can get involved with reverse logistics because of competition,
marketing or strategy to prepare themselves for the future legislations. A company may work on
optimizing reverse logistics as a strategy, to prevent other companies entering the market to gain
the direct and indirect benefits (Table-1)
Table-1 Direct and Indirect Benefits of RL
Direct Benefits Indirect Benefits
input resources Antedating/hindering legislation
Budget Market fortification;
Bargain Green image
Significance recovery enhanced consumer and supplier
relations

23
Legislation- Legislation signifies that a corporation should recover its merchandises or accept
them back, e.g. packaging recycling quotas in Europe (EUROPA, online) and home shopping right
to return in some countries as UK (Office for Fair Trading, online).
Extended responsibility refers to a set of principles or values, to become sensibly involved with
reverse logistics. For example, the issue of Paul Farrow, the author of Walden Paddlers, Inc., with
“ the speed at which consumer merchandises travel through the market to the landfill”, pushed
him to an inventive venture of a 100-percent-recyclable kayak (, Farrow et al., 2000).
4.2 Why -reasons(sender):returnreasonsforReverseLogistics
Unevenly, products are returned or discarded because either they lose their functional value or
the customers are unhappy with the quality or the products are not needed. This section explains
the returns or discard reasons and are listed in the hierarchy of the usual supply chain: Start from
manufacturing, to suppliers till the products touch the consumers. Therefore, it is differentiated
between manufacturing returns, supplier returns and consumer returns (Figure-6)
Manufacturing returns
The manufacturing returns are defined as the components or products which are to be recovered
in the production stage. This happens for a range of causes, such as, left over raw materials, final
or the intermediate products may fail quality checks and have to be revised or by-products may
affect the production. Excess raw material and production scraps characterize the product not-
needed type, while quality-failed returns come under the “faulty” category. In sum, manufacturing
returns comprise of the following:
 Excess raw material;
 Quality-control returns;
 Production /by-products left-overs.
Distribution or suppliers returns

24
The distribution returns denotes the returned products that that are originated during the
distribution stage. It refers to the functional returns, stock adjustments, product recalls and
commercial returns.
Functional returns denotes all the products which are returned due to functional failure or
unexpected functioning. An instance is the one of distribution carriers as pallets: their purpose is
to carry products repeatedly. Other examples are crates and containers.
Stock adjustments is the process of stock re-distribution in the supply chain when an actor re-
distributes stocks, for example between warehouses or shops, e.g. seasonal products (De Koster et
al., 2002).
Product recalls are often initiated by the manufacturer or the supplier and they are the products
recollected because of safety or health concerns with the products.
B2B commercial returns are those returns which a retailer has a contractual opportunity to return
faulty/unsold products back to the supplier. The products returned could be the
incorrect/damaged deliveries, to products with a short shelf life or unsold products. In Brief,
distribution returns comprises of:
 functional returns (distribution items/carriers/packaging);
 Stock adjustments;
 Product recalls;
 B2B commercial returns (e.g. unsold products, wrong/damaged deliveries);
Consumer Returns
The final category comprises of consumer returns, i.e. those returns which gets initiated after the
product has reached the final customer. There are various causes for such returns like:
 B2C commercial returns
 warranty returns;
 Service returns (repairs, spare-parts);
 End-of-use returns;

25
 Change of mind
 Incorrect product delivery
Figure-6- Types of returns in RL
The reasons listed above are more or less conferring to the life cycle of a product. The
Reimbursement process provides consumers the opportunity to change their mind about making
a purchase when their needs or expectations are not met. The list of accentuating causes is
extensive, for instance, the apparels size, color or the texture of the fabric used. Irrespective of the
underlining causes, when a consumer returns a brand new product availing the money-back-
guarantee, it comes in the category B2C commercial returns.
The other two reasons, service and warranty returns, refer to an improper functioning of the
product during its usage, or to a service that is related to the product which can be beneficial to
the consumer. The consumers holding a product that is in the warranty period, can return
products that do not meet the assured quality standards. At times, these returns can be repaired
or the consumer benefits from a new product or they get the money back upon which the product
returned required recovery.

26
After the expiry of the warranty period, consumers can still get benefits from repair services, but
they can no longer get a substitute product. Products that are returned for improper functioning
can be repaired at customers’ visibility range or sent for repair. End-of-use of product returns
denote to those conditions where the consumer has a return opportunity at a particular stage of
the product lifecycle. At last, end-of-life returns refer to those returns where the product is at the
end of their economic or physical life. Those products are either returned to the OEM because of
legal obligations or other companies like brokers take them for value-added recovery (see How
section).
4.3 What: Typesand characteristicsof returnedproducts
A second perspective of Reverse Logistics is what products are actually being discarded /returned.
Moreover, it is not only the product that is significant but it is also the characteristics. The
following three characteristics of the products have an effect on the recovery mechanism.
 product composition
 Product deterioration.
The product composition is explained in four phases:
 Ease of dismantling (removing workable parts from the products).
 Similarity of constituting elements (contains a product out of one or more components:
this has an impact on the recycling process.)
 Presence of harmful materials (toxic materials in batteries or PCs should be removed
before being recycled)
 Effortless transportation: If the product needs a particular transportation. Collection of old
products and distribution of new ones can be moved together which reduces the
transportation costs.
These features typically affect the finances in RL activities. They regulate whether it will be cost-
effective to disassemble and recover parts or to dispose the product assembly followed by
recycling. All these features are product inherent and they are determined while in the product
design phase.

27
The product deterioration features, which determine the functionality of the product to decide its
further use. This intensely effects the recovery decision.
 Inherent deterioration: The product age during its usage. For instance, a battery with
limited life has low reuse options.
 Reparability: Ease of repairing or upgrading the product. Products like rechargeable
batteries can be effortlessly restored.
 Consistency of deterioration: do all parts age equally? The former has more preference, but
is not always conceivable. In the latter case the product can be sent for remanufacturing or
parts recovery.
 Economic deterioration: products may become superseded if their functionality becomes
outdated, like PCs. This offers a chance for re-use in market or for parts recovery.
4.4 How:Reverselogisticsprocesses
The how perspective is referred to explain how Reverse Logistics works in practice: how is value
recovered from products. Recovery is only one of the activities involved in the whole reverse
logistics process. Initially, the product is collected (collection), then, the product is inspected,
selected and sorted (combined inspection / selection /sorting process), following which, there is
recovery (involve directly or indirectly a form of re-processing), and finally there is redistribution
(see Figure 3).

28
Figure-7- process in RL
Collection is, getting the products from the consumer to a point of recovery in a supply chain
network. The products are then inspected, i.e. their quality is measured to make decision type of
recovery. Products are then sorted and moved depending on the recovery type. If the product
quality is (close to) “as-good-as-new,” then it can be served in the market straightaway by the
process of re-use, re-sale and re-distribution. If not, then the other type of recovery technique can
be used, i.e. re-processing.
Re-processing can arise at any level: product level (repair), module level (refurbishing),
component level (remanufacturing), selective part level (retrieval), material level (recycling),
energy level (incineration) (Thierry et al., 1995). At module level, the product, e.g. a large
installation, gets upgraded (refurbishment). In component level recovery, products are undone
and the parts can be used either in the manufacturing various products (remanufacturing). In case
of material recovery, the materials are sorted and clustered depending on the quality measured.
Lastly, in energy recovery, products are burned and the released energy is absorbed
(incineration). If the products doesn’t fit in any of the recovery processes, then products are sent
to disposal.
4.5 Productflowin reversesupplychain.

29
In particular, Figure 5 represents a variety of reverse flows arising at various stages of the supply
chain. Each reverse flow has accompanied with a cause of return (why) and also with the type of
recovery (how).
Figure-8 product flow in RL in supply chain
4.6 The invertedpyramid
The inverted pyramid was introduced to evaluate products and services depending on its value
and importance. The concept of the inverted pyramid layout is comparatively simple. The author
ranks the factual information to be conveyed by its significance. The most vital sections of
information are presented in the first line, called as the lead. This typically reports the so-called
"five W's" (who, what, when, why, where). Consequently, the author is able to determine the key
features of the concept. The author then offers the rest of the evidence and information details in

30
descending order of significance, putting the minimum essential facts for the very end. This
inverted pyramid framework is applied to the recovery option of the supply chain.
Figure 9 the inverted pyramid for recovery option.
Recovery options at the topmost level of the pyramid are of high significance value, whereas
options moving down to the bottom of the pyramid has less value from the products. The returns
in any phase of the supply chain (manufacturing, distribution and customer) can be recovered
depending on the options both from the top and from the bottom of the pyramid. The general
resemblances between the inverted pyramid to that of the Lansink’s waste hierarchy which was
presented by Dutch Member of Parliament in 1979; prevention, re-use, recycling and proper
disposal (www.vvav.nl). The recovery options at the top of the pyramid are of high value and
more environmentally friendly than options close to the bottom, which recover less value from the
products. Initially, the Lansink’s hierarchy was combined together with respect to the ecological
responsiveness of the recovery option. Yet, the hierarchy is uncertain. For instance, In the case of
paper recycling against land filling, one may go against recycling because the paper is which is
decomposable and needs low energy than the de-inking and bleaching procedures essential for
recycling. With respect to the financial assessment of each recovery option, that depends for

31
example on the presence of an identical market. Consequently, it is conceivable that a used
product has basically no market value, but is very valuable as a collection of spare parts.
4.7 A decision framework for ReverseLogistics
This part of the chapter describes the decisions with respect to Reverse Logistics at three phases:
strategic, tactic and operational. To shape up this hierarchy involvement the taxonomy of
Ganeshan et al. (1999) and the review of Schmidt et al. (2000) is used. Also the traditional
functions of a company like procurement and marketing is taken into account. To decide on the
process of Reverse Logistics, a company does not essentially have to follow the decision hierarchy
step by step. In precise, in attendance of legislation, an organization may not have authorization to
decide on recovery option.
Figure-10 decision framework for Reverse Logistics

32
The entire framework is divided into three decision levels namely strategic decision level, tactic
decision level and operational decision level. At the strategic level, the decisions are long-lasting
and are difficult to change. To begin with, whether to do recovery or not and if so, then which sort
of recovery. The driving forces act as a type of supra-objectives. The reason for returns, along with
the in-built characteristics of the product, gives an idea about the highest value recovery of the
product. The recovery option can be taken into consideration while designing the product, by
counting design for recovery. However, when some decisions remain unchanged, other decisions
gets more constrained, with respect to efficiency. Consequently, every decision has an impact on
other decisions.
At the tactical level, one has to internally assimilate the returned product with the whole
organization. To be more specific, the transportation costs, handling costs and the warehousing of
returns have to be allocated. Procurement is the main issue taking the returns into account. Hence,
one has to adopt an effective forecasting methods. In addition, one has to take care of the
instantaneous reactions in the supply chain. To initiate this, companies may ruminate to outsource
(fully/partially) return operations. Therefore, synchronizing mechanisms have to be established.
Additionally, there are usual production development and inventory management resolutions.
However, the value of recovered or recoverable products has to be determined.
At the operational level, the production scheduling and control related decisions are taken. The
disassembly and reassembly operations are also a part of this level. The comprehensive systems
to monitor, control and share sensitive information also operated at this level.

33
5. Chapter-5-Research Methodology
This chapter describes the two research methods used in this study. The first is the quantitative
method which is helpful in deriving the numeric data to assess the situation and get an accurate
statistical data. The second type of research method is qualitative method which is obtained from
the management of the companies in ecommerce industry.
This section of the report also describes the advantages and disadvantages of both the research
methods and explains the process of the research.
5.1 ResearchPhilosophy
According to Collis and Hussey (2009) ‘Methodology is an approach to the process of research,
encompassing a body of methods’. In simple words, research methodology consist of various ways
and approaches of carrying out the research and also describes how to undertake a research.
There are many philosophies accessible to the researches which are exemplified in figure-4. The
research process’ onion ‘establishes the latitude of methodological choices, which can be
pragmatic to the research.
The following figure-11 shows that there are mainly four extensive research philosophies:
positivism, interpretivism, realism and pragmatism. Each philosophy offers a very eccentric
understanding on developing knowledge.
Positivism- This philosophy addresses the observable details. Positivism supposes that all realistic
information is congregated from evident experiences Positivistic philosophy is denoted to
‘Scientific method ‘which is extremely structured and has quantifiable data. This usually consists
of quantitative data and statistical hypothesis testing (Saunders, Thornhill and Lewis, 2011).
Realism- Realism is a philosophy that is related with scientific investigation and states that reality
subsists independent of the mindset. Although a researcher is inclined towards his own
experience, the researcher’s work demonstrates the facts. However, the data collection methods
and analysis process differs using either or both qualitative and quantitative data (Saunders,
Thornhill and Lewis, 2011).

34
Interpretivism: This is a type of research philosophy which reflects that world and facts are not
external and objective. They are informally created by the people. The researcher believes that the
research area is an event of a set of situation and entities at a particular time frame. Data
collection and data analysis are possible to encompass qualitative data within an inductive
process (Rea and Parker, 2006).
Pragmatism: This philosophy states that there is never a single view which can portray an entire
picture and can have multiple facts to it. It considers the significance of research work is in the
results of practical concerns. A pragmatic researcher would gather and analyze reliable, significant
and credible data (Saunders, Thornhill and Lewis, 2011).
Figure-11- Research process Onion
Merging the research paradigm, Positivism and Interpretivism, enable to investigate the issue
from various angles. A distinctive feature of Positivism- is an effort to create the science of society
as precise as expected. Therefore, special consideration is given to the accurateness of positivist
approach research measures, the effective use of statistical methods. Among the various methods

35
in positivism, quantitative method is highly recognized. Primary data was collected from
interviews that gave a statistical data to carry out the research. As a part of Positivism beliefs,
based on the study of the current state, the future can be predicted .For instance, to forecast
consumer’s behavior and taste.
In the positivism methodology, the initial phase of the study of consumers is the fact that, the
consumer is the ‘’Rational Economic Man’’ who makes a rational economic decision to purchase
using 2 main parameters; quality and price. Most of the companies, in any industry conducting
research on consumers fall in the category of positivism.
Towards the end of 1950, Positivism was extensively used in advertising and marketing
industries. The research is based on in-depth interviews and projective procedures. Such methods
are named as Quality. To carry out this research, highly skilled interviewers and analysts are
required to collect and analyze data. Such studies are based on the interpretation of the analysts.
Usually the sample size is small and the outcomes cannot be comprehensive to the common
population.
Hence, one of the conventional approaches, against which other approaches are mere reactions, is
known as positivism. This is the only approach which provides the researchers with a direct
answer.
However Positivism has been highly criticized by interpretivism, realism, critical theory, critical
rationalism, feminism and conventionalism (Kuhn,1970). Positivism basically takes for granted
the presence of socially created world that interpretivism view as a social certainty.
Positivists failed to explain the interpretations of individual’s actions and also others. On the other
hand, Interpretivism asserts that, the first and foremost step in any social studies is the detection
and description of routine reality.
Supporters of Positivism claims, the study of behavior of consumers consider the estimation of
consumers’ behavior and the proponents of interpretivism is understanding consumer’s behavior.
According to positivists consider that consumers are rational and organized planned whereas
consumers are unpredictable, irrational and contradictory. The positivists believes the study of
consumer’s behavior is the process of purchasing and the interpretivists approach is the
consumption in general.
Thus, positivism look for evidences and indicators, establishes the relationship between the
different parameters, connects frameworks and theories but doesn’t take into account the theme

36
of the influence of the scholar (i.e. subject is independent of reality). Positivism uses quantitative
methods and interpretivism uses qualitative methods by recognizing the relationship between the
subject and researcher.
5.2 SecondaryResearch
The most effective way of gathering information is by primary and secondary research. The
information of secondary research is collected and analyzed by other scholars. On the other hand,
primary research is conducted to get specific information. Therefore, secondary research differs
from primary in the following perspective.
The individual accountable for the development and conduct of investigation- In a primary
research, the investigator is solely responsible of the problem formulation, the composition of
samples, data collection, data analysis and presentation of the outcome. The individual carrying
out the secondary research has no concerns about what means the information is collected and by
what technique.
The situation of investigation- A researcher conducting a primary research is responsible for
developing the research plan and also structure the interview questionnaire in a way that it meets
the information required for the research whereas, the researcher conducting a secondary
research is solely responsible for analyzing and processing the data collected by other
researchers to gather new information.
5.3 PrimaryResearch
Primary research is the method of collecting information by any means, other than the data that
has been collected, processed, analyzed and recorded by someone else. It consists the data and
information obtained from surveys, interviews, observations and experimentation. The primary
data can be used to reproduce information acquired from elsewhere to further strengthen the
information. Practically, the problem which is being solved has already occurred in other
companies or with other people. Hence, it is important to take the data from company’s websites,
magazine, company’s reports and take into account the current practices, process and opinions.
Whichever information was used in the report, it is important to mention its source.
5.4 QuantitativeResearch
Quantitative research is a method of collecting and analyzing the primary data. This kind of
research investigation is carried out when there is a necessity of accurate statistical data. This

37
method uses various statistical and numerical frameworks which enables the results to have a
detailed quantitative assessment of the parameters.
According to (Morgan & Smircich, 1980), the positivist paradigm that triggers the quantitative
method is based on the point that the surrounding realism has a neutral ontological configuration,
and we as entities constituting it, respond in a definite way to this certainty. The foundation of
quantitative methods makes calculations, quantities and measurements and numerical analysis of
events (Smith, 1988). Supporters of positivism debate that there is an unbiased fact that can be
measured. In addition to this, quantitative data are more precise, valued, endorse the
amalgamation and create spontaneous relations amid place in the objective reality of the
occurrence (Cassell & Symon,1994).
5.5 Advantagesof quantitativeresearch
 Precise and comprehensive data of the problem(Frankfort-Nachmias & Nachmias, 1992)
 Accurate and clear description of the independent and dependent parameters in the
process of research.
 Firm observance to the goal and purposes of the study, the opportunity of obtaining more
impartial outcomes, scrutiny the accurateness of the theory, the formation of cause- and-
effect associations.
 The data is highly reliable and accurate as it is obtained from sociological surveys and
experiments, observations and interviews (Balsley, 1970).
 Minimizations and dismissal of subjectivity outcomes (Kealey &Protheroe,1996)
 There is a possibility of repetitive and sustained measurements
5.6 Disadvantagesof quantitativeresearch
 Deficiency of information on the situational perspective of the occurrence under
examination.
 Incompetence to regulate all of the situations and background that do not affect the value
of the reactions.
 Limitation to the conclusion of the research because of the clarity of the interview
questions and due to firm adherence to the research objective.

38
 The incapability of carrying out research of the changing process and occurrence in the
changing aspects.
5.7 QualitativeResearch
The philosophy behind qualitative research is the notion that realism is collective experience of
the individuals involved in the communication method (Morgan, 1980). The researchers, using
this method, pursue the meticulous depiction, the precise decoding and understanding of the
occurrence taking place in specific social situation (Fryer, 1991). Interpretation on the other hand
is defined as the base of the qualitative research, in which the investigators emphasis on the study
of multifaceted theory to classify the association between the perspective and the background of
the research investigated the occurrence as well as to reduce the errors (Fryer, 1991).
The qualitative research occur in the natural surroundings (Denzin, 1971; Marshall & Rossman,
1989) which means that the subject of the research is the problem that we face in our daily life
(Van Maanen, 1983).The process of qualitative method is collecting and analyzing data abler than
the quantity and the outcomes of the research can go beyond the proposition and format (Cassell
& Symon, 1994).
Hence, based on a qualitative study, the interpretation can be categorized by 3 main features.
The qualitative method which is the study of dialogue (the text and its application in the
discussion).
This method enables the study of the quality of informational philosophies that are used by the
individuals in the decryption evidence.
This method is used to identify contextually-forming factors, i.e. E which stipulates the
communicants, the physical perspective of the state of communication, alteration of situational
measures that affects the discourse of interpretation (Ting-Toomey, 1984).
5.8 Advantagesof Qualitativemethods
 Research of the most accurate picture of the occurrence which cannot be achieved by the
statistical investigation.
 Flexible approaches of data collection, analysis and elucidation.
 Usage of a holistic methodology to the event under examination(Bogdan & Taylor ,1975;
Patton , 1980)

39
 Capability to intermingle with study contributors in native language and in terms of
background (Kirk & Miller, 1986).
 The usage of the metaphors are built on primary and amorphous data.
5.9 Disadvantagesof Qualitativemethods
 Offset the original objective of the study as a result of changing context of research. (Cassell
& Symon, 1994).
 Drawing conclusion which might have been by influenced by individual’s personal
experiences.
 The incapability to examine the general association between the various investigated
studies.
 Absence of comprehensive objective and consistency of the inference, as the respondent is
free to decide what to answer.
 The researcher has to have a very high level of professionalism to gather the necessary and
relevant information.
5.10 Datacollectiontechnique
For conducting a research, the preparation of collecting data could be problematic and complex
(Yin, 2003). If the process of data collection is not handled well, then entire investigation can be
compounded. There are 2 main types of data collection; primary and secondary (Saunders et al,
2009). For this report, both the types of data have been collected.
The secondary data was collected and analyzed in the chapter-3. The data was obtained from
various literature sources and was reviewed to get information about the most recent work from
various authors.
There are six main sources for collecting the primary data; Documentations, interviews, surveys,
archival records, direct observations, physical artefacts (Yin, 2003).For this study, interviews,
observation and survey was chosen for collecting the primary data. The following table shows the
challenges and advantages of each technique.
Table-2 –research method

40
Methods Purpose Advantages Challenges Usage
Interviews To understand an
individual’s
opinion and
experiences and
get detailed
information on
the subject.
 Can be flexible
with obtaining in-
depth information
 Develops
relationship with
the respondent
 Effective
conversation to
get additional
information
 Can have
strict time
bound
 Can be
expensive
 Can be biased
 Can be hard
to analyze
 Semi
structured
interviews
 Unstructured
interviews
Online
survey
To collect
statistical data
about consumer’s
opinion on
returning
products online
 With statistical
data ,it is easy to
validate the
customer’s
expectations
 Helps in gathering
accurate data
 Respondents
can be biased
while filling
the online
form.
 Respondents
may be not
sincere while
answering
the questions
Use the statistical
data to present the
consumer’s
behavior
Observations To collect data by
observing the
consumer’s
behavior and
employees
 Data is collected
from a real time
experience. So it
remain unbiased
 Companies
reluctant to
aloow the
observers as
it might
disturb the
customers
Use to get
information about
how the
employees deal
with returns in
physical stores.
Source Yin(2009)
It is highly recommended to combine the data collection techniques like interviews and
questionnaire (Eisenhardt, 1989).In this research, survey is considered as the main source of data
collection. Interview was conducted mainly for 2 reasons:
 To find of the companies are intact with the customer’s feedbacks and expectations.
 To evaluate the process of reverse logistics

41
5.11 Interviews
An interview is a research technique for collecting primary data. In this process , a sample of
interviewees are questioned in context to the subject of research(Collis & Hussey, 2009).For the
purpose of this study, unstructured or informal and semi-structured or formal interview
techniques are chosen(Figure-6) to enhance the quality and reliability of collected data by
obtaining additional information.
Figure-12- Interview structure, Source- Adapted from Saunders (2003)
A list of questionnaire was developed in context with RL for conducting semi-structured
interview. A list of questionnaire is prepared for the interview (appendix-5) but the questions
varied subject to the flow of conversation. In the informal interview, the questions varied
depending on the position of the interviewees. For a better design of the semi-structured
interview, some of the topics were encompassed as recommended by Saunders et al (2007) as
follows:
 Opening the interview session

42
 Usage of appropriate language
 Questioning
 Active listening
 Good understanding and summarizing
 Dealing with tough interviewees
However, informal interview gives an opportunity to discuss freely on the topics that formal
interviews doesn’t allow.
5.12 Survey
As a part of primary research, a survey was conducted by preparing questionnaire relevant to the
area of research. The sample size was hundred with 100% response and location was UK. 55% of
the respondents are from Kingston University, 20% are from my neighborhood and 25% are my
colleagues at work. This survey was conducted to get the statistical data about the consumer’s
behavior and expectations on returning the products online and the return procedure and policy.
The set of questionnaire is shown in appendix-5.
5.13 Observations
A series of observation was carried out as a part of data collection. The observation sessions also
enabled customer interaction which helped in analyzing the situation in detail.

43
6. Chapter-6:DataAnalysis
This chapter analyses the results obtained from qualitative and quantitative research methods.
A survey was conducted to find the consumer’s experience and expectations on returning
products online with a sample size of 100. As a part of qualitative data, interviews were
conducted. 5 Employers from leading companies in ecommerce industry were interviewed
(Argos, Amazon, currys, the PC world).
6.1 QuantitativeAnalysis
The data obtained from the survey conducted have been analyzed using Microsoft excel. The
results are shown in appendix-4. The aim of this survey is to-
 Find the relationships and associations between the outcomes of qualitative and
quantitative research.
 Research on customer's experience and consumer’s behavior in online shopping and get
their feedback on the return policies and procedure to improvise the process of reverse
logistics.
Analysis of the data from the questionnaire shows that curriculum vitae of a respondent are a fair
and reliable indicator of potential customer.
Table-3 CV of Respondents
Q1 Sex male 65%
female 35%
Q2 Age
Group
Between 18-30 55%
Between 30-40 24%
Between 40-55 15%
Above 55 6%
Q3 Marital Single 64%

44
Status Married 36%
Q4 Income
per
annum
Less than £20,000 27%
£20,000-£40,000 53%
£40,000-60,000 10%
Above £60,000 5%
A standard application form must always be specified with information such income, age group,
gender and marital status. The companies in Ecommerce industry offers products with affordable
price. Initially, the customers looking for quick delivery and affordable price were the target
customers but slowly it has gain momentum and people of all age group with standard income
prefer shopping online (Bloomberg, 2015). The age group between 18 to 30 shop online with men
being the dominant with 65%. Around 53% of respondents with income between £20,000-
£40,000 has a standard income.
Tbale-3-Consumer’s motivation of respondents
Q1 How often do you shop online Very frequently 31%
Often 29%
occasionally 31%
Rarely 8%
Never 1%
Q2 What types of products do you buy
online
Electronics 67%
Apparels, shoes and
accessories
20%
Books and stationary 13%
Q3 Have you ever returned a product
online
Yes 59%
No 41%
Q4 How convenient was the process of
returning a product online?
Very convenient 18%
easy 30%

45
Not bad 32%
Not easy 20%
Q5 How would you like to return the
product?
Via post 16%
Collection home 76%
Collection at a local store 8%
Q6 Do you read the return policies
before buying any products online?
Yes 32%
sometimes 52%
No 13%
Q7 How fair is the return policy of the
company?
Extremely fair 10%
Very fair 33%
Moderately fair 41%
Slightly fair 7%
Not fair at all 9%
Q8 What could be a possible reason for
you to return your product?
Bad quality 25%
Damaged 26%
Didn’t like the product when
arrived
27%
Didn’t like the color 3%
Change of mind 2%
Found a better option 2%
others 6%
In a recent study by Forbes, the actual reasoning behind online shopping is revealed.
Interestingly, it is not only the low price that attracts shoppers but it is the product categorization.
A survey conducted (sample size of 1000) by Simon-Kucher & Partners, a global consultancy that
counts retailers among its clients revealed that, 24% of the shoppers look for low priced products.

46
Others cited, free delivery option, return policies and process of returning products. Hence, it
shows that, customers look for better process in delivering and also returning while shopping
online.
A survey conducted for this research (Appendix-5), with sample size 100 and target customers in
UK, the results were collected over a weeks’ time. An overall breakdown of the respondents is
shown in the following chart.
It can be seen that, 60% of the customers frequently shop online and 51% have returned their
products. With a wide range of products available, 67% of the consumers buy electronics and the
rest 33% buy other products such as clothes and accessories (20%) and books and stationary
(13%). The survey shows that, customers sometimes read the return policies (52%). However, a
customer returns the product mainly due to bad quality (25%), damaged products (26%) and
unhappy with the product on arrival (27%). The companies have their own return policies but
76% of customers are looking for collection from home instead from going to a local store or via
post.
The main reason behind this survey is to find what the consumers like, think and expect from the
companies. The interview is done to find if the companies are intact with their consumers’ needs
and choices. However, the companies which are high on customer’s satisfaction have high
sustainability (Forbes 2015).

47
6.2 QualitativeAnalysis
Qualitative Analysis was done by taking into account the opinion and expressions of experts from
leading companies of ecommerce industry. The interviewees are the employees who are a part of
logistics and supply chain management. The table 2 shows a breakdown analysis of the
interviewees.
Table-4 Interview details
Company Location Number of
employees
interviewed
Designation Years of
experience
Interview
date
Interview
mode
Amazon
Seattle,
Washington,
US
2
In-stock
Manager
4 12th oct
2015
Telephonic
BOM
Configuration
Specialist
5 16th oct
2015
Skype video
call
Currys PC
world
London,
United
Kingdom
3
Store
manager
12 25th sept
2015
Face-to-face
Sales advisor 7 25th sept
2015
Face-to-face
Knowhow
advisor
4 27th sept
2015
Face-to-face
Argos London,
United
Kingdom
3
Store
manager
5 20th sept
2015
Face-to-face
Retail advisor 4 20th sept
2015
Face-to-face
Logistics
manager
12 21st sept
2015
Telephonic
EBay US
2
Distribution
center
operation
manager
10 3rd oct
2015
telephonic
Software
engineer in
logistics
department
4 8th oct
2015
Telephonic

48
The following section describes the analysis from each company. (Interview questions can be
found in appendix-4).
Table-5 Q&A of interview
Qs no Question Company Answers from interviewees
Q1 How important is the process of RL in
your company?
Amazon We have been focusing on the reverse
logistics as it’s a costly affair and also has
an effect on the brand. Our efforts are on
making the return process easy for our
customers which is a continuous
development. The customers tend to spend
18% more while ordering products online
and returning them at local stores. So for
us, we have been trying to work on our
process and policies where a customer can
find it easy and cost effective to return the
product.
Currys Returns are usually bad for the company’s
image and has an impact on our
inventories. Although we cannot control
the returns, but we have a strict return
policy to put a check on the returns.
However, we are the best quality products
with best packaging.
Argos Returns are additional workload to the
company as its not expected and planned.
It costly and time consuming. It is a line
running parallel to the forward logistics in
supply chain.
Ebay Logistics are the most important part of
our company. Be it forward or backward.
We do understand cost involved in the
process of RL but more than cost, it’s the
customer satisfaction that is important to
our company.
Q2 How frequently do customers return Amazon Customers return products only when they are

49
the products and what types of
products is often returned?
damaged. However, few change their mind and
doesn’t like the product when they receive it. It
is difficult to say the frequency of return
products but mostly customers return the
apparels and least returned products are
cosmetics and home decors.
currys Customers view the product online and come
to store to have a hands on and then place an
order. So our return rates are low unless until
the products are damaged or has packaging
issues.
Argos Our customers read the product specifications
at our stores and also online. They return
products of they do not like the product when
arrived like the color or the size. The frequency
cannot be stated but 2 out of 12 customers do
return their product at our stores which
increases the cost.
Ebay Any product that varies with size color and
texture has a probability of returning back. We
deal with all kinds of products and apparels are
the one which is often returned back. Other
than that electronics which doesn’t match the
specifications like plugs or any other
configurations are returned.
Q3 How do you plan the reverse logistics,
keeping customer service in mind?
Amazon Keeping customers in mind, we make the
returns as convenient as possible for the
customers. We have local stores where
customers can return the products. We also
have option to return the products visa post.
The returning process depends on the types of
products purchased. The customers are also
given an option of to choose the way to return
as per their convenient. Products returned are
also costly for the consumers. So we try our
best to avoid returns.
currys The customers return the products in the store.
We have a team that work on the product to
verify its condition and then we take the back

50
the product. Majorly we deal with electronics
so making sure the product has been returned
with a proper condition is mandatory.
Argos The products returned by the customers are
inspected and depending upon the state of the
products, it is either repaired or exchanged or
disposed. We have a centralized system called
as RMA (Return Merchandise Authorization.
We also work closely with our customers to
know the reasons of why they are returning
the products. The process of returns are also
documented so ensure that customer’s
feedback are taken into account.
Ebay We have various sellers in our websites.
Basically it depends on the seller. The returns
are usually via post and the charges are
covered while making a purchase. The
customers are given options in choosing the
option to return the product.
Q4 Do you take feedback from customers
about the experience in returning the
products
Amazon An overall feedback about the shopping
experience is taken. However We have a
drop down option for the customers while
returning product online.
currys Al overall experience is taken from the
customers and we do ask them the reason
for returning the products.
Argos
eBay Yes, we take feedback but receive very few
feedback as I believe the customer is
frustrated or may be because they don’t
care. Anyways, we are planning to launch a
telephonic feedback program.
Q5 How do you handle the returned
products
Amazon In RL, we collect the product from the
collection point and we have a process in
place which is called collection, selection,
sorting and disposal or recovery. The
collection from the customer is done via
post or store collection or collection from

51
home. Collection from home is rare and
depends on the type pf product.
currys We don’t immediately take back the
product. We inspect the product and try to
fix them. If the product has functionality
issues then we replace them and give the
customer a new one. We have a team called
knowhow who works on repairing the
digital products.
Argos We take the product back for repairing and
inspection. If it’s damaged we do replace.
We also exchange the products depending
upon the customer’s preference.
eBay
The consumers usually return back the
product to the sellers directly. We are kind
of the interface giving the customers a
platform. We have returning methods by
offering to buy and print postage on eBay.
Return requests only count as a defect
when the item is being returned because it
was faulty. Once the buyer return the
product, it’s notified to the seller on the
eBay’s dashboard. The seller has an option
to either accept to recline the request to
return and offer partial refund. The seller
also helps in resolving the issue.
Is not this process long enough? As I mentioned, we are just the interface
and we need to be fair for both the parties.
For more information on returns, we can
visit our website
http://pages.ebay.co.uk/help/sell/return-
process.html#process
Q6 How does the Returned products
impact the company
Amazon Every ecommerce company has an impact
because of its returns. Around 5-8% of the
revenue goes in refunds. We don’t have any
planned budget for refunds but we do keep

52
a check on the product types and quality to
avoid returns. The impact is high but is
unseen. The costs in handling returns are
high. The price of RL is more than FL The
transportation, inventory, warehouse cost
are a part of our RL. A major part of the RL
is maintenance where an additional cost is
included.
currys It impacts every part of our business. Like
inventory. It’s an additional and unplanned
cost.
Argos
eBay It impacts the brand image for sure. And
also the returns depends on the sellers and
the type of products they sell. Not every
product can be returned. And a survey
conducted by us showed us that around
89% of the customers buy product after
reading the return policy.
Q7 What steps do you take to prevent the
return?
Amazon We do our best to provide the appropriate
product description with images and zoom
technology. With apparels and shoes, we
provide measuring guides which helps the
customers to provide to find the best size.
The returns are sometime when customer
changes their mind which is again unseen
and can’t be forecasted. The best way to
avoid returns are make the products
visibility high. Give as many details as
possible.
Currys We have lot of product quality checks.
Preventing returns are tough. We follow a
set of protocols and standards for all the
electronic appliances. And because we
have a physical store where the customer
can visit and have a hands on the products
so the customer really doesn’t change their
Argos

53
mind of color and texture.
Ebay The best way to prevent returns is by
proving best quality products but as we are
the interface between the buyers and
sellers, the products flows from across the
globe. Preventing the returns is completely
on the sellers bucket.
Q8 Do you have any plans in investing
in technology which can help in
preventing returns
Amazon We are the leading company is ecommerce
now. Our websites are cost effective and
maintained with efficient engineers. We
are working hard to resolves the graphics
issues but it’s too early to comment on the
investments
eBay We are working on making our website
more user friendly and easy navigation.
6.3 Analysisof theinterview
The following are the points from the interview
 Companies do understand the importance of RL but as a brand image. The companies
with physical stores have an advantage over the offline stores. The consumers are likely
to spend more when they return the product via post. The process is overall time
consuming and at times frustrating to the consumers. But when the consumer return a
product in a physical store, the store offers a variety of other options as well , which
increases the chance of purchase
 The products which are frequently returned, range from apparels to electronics. The
consumers often get disappointed with the type of texture and color. This is across all
platforms, irrespective of the company’s brand value. However, the color of a fabric also
depends on the graphical resolutions of the personal computers and browsing system.
With electronics, all the companies do follow a quality check and packaging.
 The companies trying to make the return process very convenient for the customers.
They have options like via post, drop at local stores.

54
 The impact of the returns on the companies are high. The companies quickly react to
the return instead of responding them wisely. All of them considered returns are an
additional cost and work over load. They consider returns as a leakage in the revenue of
the company. However, they take the feedback from the customers. The feedback is
merely a formal process without any significance. The companies ask the reasons for
the returns and not the process of returning. The more complex is the process, the more
resistant the consumer gets in making a purchase from that company. Like eBay, the
return process is highly complex and lengthy.
 To prevent the returns, companies focus on providing all small details about the
product to the consumer with facilities like zoom in zoom out technology.
Summary - The companies are sensitive towards their returns but they are enforced to
do it due to competition and legal procedure. The returns are very complex for a
company which acts like a platform for buyers and seller like eBay. Amazon makes its
very simple for the consumers but without option of home collection. The physical
stores do have an advantage over the online stores. They consumers can view the
products and have demonstration before making a purchase and this is the reason why
amazon also has plans to open its physical stores in US and India, (Source- Interview).
Returns cannot be predicted. They are the outcomes of the consumer’s reaction.
Companies do not invest in technology, may be because of high installation and
maintenance cost.
6.4 Analysisof the observation(participant)
Observation includes “the systematic surveillance, recording, depiction, examination and
interpretation of consumer’s behavior” (Saunders, et al., 2012). Observations can enhance
the richness of data.
The observation was carried out over a period of 5 days at the local stores(Currys and
Argos). The observation also included the customer interaction and was recorded in notes.
The main aim of this technique was to observe the customer and employees handling the
returns at the physical stores. The following are the points observed:

55
 The consumers were not welcomed when they came to return the products and
their waiting time was high.
 The customers had to repeatedly explain the issue to various employees which
shows that the employees were not aware of the right point of contact.
 The consumers were left unattended for quite some time which annoyed the
customers.
 The employees lacked in product knowledge which was further disappointing to the
customers.
 The customers were highly non-cooperative during the return process due to long
waiting time.

56
7. Chapter-7 Analyticalfindings andconclusion
This chapter shows the analytical findings from the observations of customer’s behavior
and with respect to customer’s expectations, company’s perception on RL and
stakeholder’s take on RL. A gap analysis is done between the customer’s expectations and
company’s perception using the customer service gap model.
7.1 Customer expectationsandbehavior
“Traders will need to pay close attention to structure the return policies that are customer
oriented," says Paul Bates, the VP of Information Products Group, BizRate.com. "Online
purchasers convey us every day that the key to gain their constancy is by improving the level
and excellence of customer support." (Source: Bizrate.com Survey). Other significant findings
from the study are:
 57% of the online shoppers say that the return policies effect their decision to shop
with an e-retailer.
 The three leading products returned are apparels (40%), software (20 %) and
books (15 %)(Survey)
 The ability to exchange a product for another item (58 percent)
 78% percent of consumers prefer home collection rather than by mail or returning
at a local store.
7.2 Company’s perceptionon RL
The company focuses more on forward logistics and considers RL as a burden and additional
cost. During the interview, the management showed lack of interest in managing RL, rather
blamed the customers for not ordering the product right. It was also observed that the
employees lack in product knowledge which was very disappointing to the consumer. The

57
company should focus on preventing returns not only by proving appropriate details about the
product but also in investing in technology which can be of HD videos and virtual reality
7.3 Stakeholder’stakeon RL
This report has examined the backgrounds of implementation of RL. On the basis of
stakeholder theory, the perceptions of manager's strategic attitude and organizational slack,
the study proposes that the probability of firms embedding RL systems is governed by the
availability of stakeholder salience, the accessibility of resources in the firm, and a liberal
strategic attitude of managers. Overall, the study authenticates the theoretical controversy.
Consumers, employees, and the administration salience with respect to the RL activities have a
substantial impact on the final decision of embedding RL systems.
7.4 Gap Analysis-between consumers expectationsandcompany’sperception
7.4.1 The customer servicegapmodel
Providing greater value to the consumer is an enduring concern of the companies. This not
only comprises of the authentic physical product but also customer service. Companies which
do not provide decent quality customer service that meets the of consumer’s expectations, are
tough to sustain in a market.
SERVQUAL is a framework to measure service quality(Figure-10). This model is established by
Parasuraman, Zeithalm and Berry in 1985 and this can be used by companies across all
industries.. The purpose of this model is to:
 Recognize the gaps amid customer expectation and the tangible services delivered at
different phases of service delivery.
 Close the gap and develop the customer service.
The model identifies 5 gaps namely:
 The customer gap- This gap is the variance between customer anticipations and customer
insights. Customer anticipation is what the customer expects depending on the availability
of resources and is inclined by lifestyle, friends and family, information available and
accessible. Customer insight is completely subjective and is based on the level of
interaction between consumer and the product.

58
As per the survey conducted, apparels are the products that have high probability of
returns. Thus, the companies holding a physical store and online store, where a customer
views the product online and gets a hands-on experience in physical store, has low
customer gap.
However, this can gap can be further minimized by providing high quality videos and also
home trail must be introduced. Home trails can increase the chance of purchasing as the
customers are provided with options.
 The Knowledge Gap- This gap is the variance between the customer’s anticipations of the
service offered and the provision of the service by the company. In this instance, the
companies are unaware or have incorrectly inferred the customer’s anticipation with
respect to the company’s services. If a knowledge gap subsists, then it means that the
companies are working on incorrect or non-existing customer requirements.
The survey conducted showed that 78% of the online shopper opts for home collection but
few companies offer this service depending on the product. Customers buy online with a
mindset of making a cheap deal. But the return process makes the experience expensive.
This Gap can be reduced by taking feedback on the improving the process of reverse
logistics as the consumer is a part of the company’s stakeholders.
 The policy Gap- As per Kasper et al, this gap replicates management’s inappropriate
conversion of the service policy into rules and guidelines for employees. Some companies
find it difficult in interpreting consumer anticipation into precise service. This gap may see
consumers pursue a related product with improved service elsewhere.
In eBay, the returning process is highly complex when compared to amazon. This is a
reason why returning products at eBay is complicated compared to amazon (Forbes, 2013)
 The delivery Gap- This gap reveals the flaws in the performance of the employees.
Companies with this gap may postulate the service essential to support customers but have
then fail to train their workers, to match the promised service. As a result, employees are ill
prepared to achieve consumer’s requirements.

59
During the observation, it was observed that employees were unskilled in handling the
products and requires from the customer. They weren’t aware of the returning procedure
and process which further made a negative customer experience. This can be overcome by
training employees of products and process.
 The communication Gap- The companies make promises to deliver high class services and
products through advertising media and communication channels and increase customer
anticipations. While over-promising does not match the tangible service, it generates a
communication gap. Consumers are dissatisfied because the promised service does not
match the anticipated service and therefore the consumers look for substitute product.
Figure-13- customer service gap model

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