The South African fashion retail industry is the third-largest contributor to spending in South Africa and employs the second largest number of employees in the retail industry (Statistics South Africa 2018). There are three main segments, luxury, functional apparel, fast fashion and products including, apparel, footwear and accessories (Wen et al. 2019:34). The industry has a high markdown ratio stemming from demand uncertainty and personal preferences. The average markdown ratio is 50% meaning that firms are not achieving full profit margins (Jin & Shin 2020:302). Supply chains in this industry are demand driven by consumer trends, meaning that forecasts are difficult to create (Giri, Thomassey & Zeng 2019:349). Other unique characteristics are short product lifecycles because of seasonal trends and a large variety of products (Martino et al. 2017:140). Customers are now more informed about goods from internet channels, and they are challenging the way fashion retailers are doing business. Customers do not want a simple product but a personalised service (Giri et al. 2019:349). A further challenge in this industry is the excessive amount of damaged goods that may need to be collected from the customer’s location, which can be expensive and time-consuming (Pishvaee et al. 2010:270). Customers order multiple goods that vary in size and colour and only keep a few goods and return the rest, creating an influx of stock at stores and warehouses and increasing transportation costs to achieve customer service levels (Cullinane et al. 2017:4).

An omni-channel retail strategy stems from a multichannel retail strategy. A multichannel retail strategy offers goods, information and support through multiple channels that do not interact (Silva, Duarte & Sundetova 2020:418). A channel is a customer contact point where the firm and the customer interact with each other (Beck & Rygl 2015:170). There are multiple channels, including brick-and-mortar, e-commerce and home shopping networks (Sit, Hoang & Inversini 2018:163). Beck and Rygl (2015:174) indicated a precipitate strategy between the two retail strategies called a cross-channel strategy where each channel has its individual structure, but consumers can interact easily between the channels. An omni-channel retail strategy integrates various channels, which have created a seamless shopping experience (Silva et al. 2020:419). The firms use this strategy to benefit from existing multichannels through data sharing, product consistency and an integrated logistics process. The integrated process from this strategy ensures that consumers have an integrated view of the product in all channels from purchase, return or exchange (Adivar, Hüseyinoğlu & Christopher 2019:258).

A disadvantage of an omni-channel retail strategy is that consumers are hard to please because of having access to social media networks allowing for price comparisons and choosing the best alternative offer (Berman & Thelen 2018:600). However, this strategy allows for increased customer satisfaction and a better data collection process to help depict trends (Silva et al. 2020:428). The return process in literature is described as a singular linear process and does not consider the implications for managing returns with an omni-channel retail strategy (Bernon, Rossi & Cullen 2011:484–510). Therefore, there are numerous ways a customer can implement returns, meaning that the determinants and consequences of the return channel increase complexity. The increase in complexity stems from integrating returns, processes and inventory normally operated separately in reverse logistics management (Bernon, Cullen & Gorst 2016:595). Operations have become more difficult from a retailer’s perspective, as customers may return products to any channel available (Hübner, Holzapfel & Kuhn 2016:257). The most common factor for increasing returns is that customers use online platforms to purchase goods and cannot touch or test before purchase (Daroch, Nagrath & Gupta 2021:41).

Supply chain disruptions are unplanned events that can disrupt the standard flow of resources and can generate an array of risks in the supply chain (He et al. 2019:134). These SCDs can propagate throughout the entire supply chain and can have deleterious effects on each network member (Sheffi 2015:170). To minimise the effects, firms need to identify, respond and retaliate to SCDs in a timely manner (Ivanov et al. 2017:22). This shows the importance of implementing correct supply chain disruption management (SCDM) processes (Revilla & Saenz 2017:7). Supply chain disruption management is implemented when traditional risk management practices do not prevent the SCD from occurring (Behdani 2013:346). Supply chain disruption management is a sequential and continuous process of analysing and managing SCDs throughout the entire disruption’s lifecycle (Behdani et al. 2012:8).

Supply chain disruption management consists of four phases namely disruption detection, disruption reaction, disruption recovery and disruption learning (Behdani, Lukszo & Srinivasan 2019:308). Disruption detection is the first phase and is about detecting disruptions promptly (DuHadway et al. 2019:190). The phase outlines the anticipated repercussions and characteristics of SCDs (Holzhauer 2016:34). The disruption reaction phase aims for a firm to return operations back to a normal state of functioning (Ivanov & Dolgui 2020:2907). A predetermined plan can be implemented that can help save time and may limit the impact of a SCD on a firm’s performance (Scholten, Scott & Fynes 2014:222). In the disruption recovery phase, an SCD is continuously monitored by a firm, and information about the SCD is collected (Holzhauer 2016:34). Collaboration is important, as it is too late for a firm to implement preventive measures, and parties can recover better by collaborating (Scholten et al. 2014:219). Supply chain disruption recovery is an integral step in the SCDM process and an important part of supply chain resilience (SCRES) (Hohenstein, Feisel & Hartmann 2015:99). The basic principle of SCRES is for a firm to restore operations to normal after a SCD has occurred (Ambulkar, Blackhurst & Grawe 2015:112). Supply chain resilience allows a firm to create the capability to recover from SCDs and adapt to ever-changing risk environments (Bukowski & Feliks 2012:3). There are four main elements of SCRES, but the third element, recovery, is observed as a crucial element in SCRES (Blackhurst, Dunn & Craighead 2011:383). The recovery element focuses on unplanned responses to SCDs, as predetermined plans fail to suffice (Holzhauer 2016:34). Disruption learning is the final phase of the SCDM cycle and is when a firm evaluates the implemented measures during the SCD lifetime (Behdani et al. 2019:320). The lessons that have been learnt are documented and will help prepare a firm for future SCDs.

Traditionally, reverse logistics has been identified as a cost-draining activity in the supply chain. However, recent literature indicates that reverse logistics practices can help a firm’s financial performance by recovering the value of products (Vlachos 2016:1). Reverse logistics consists of multiple processes to move goods from the customer back up the supply chain, including product return, product recovery management, direct reuse and waste management (Meyer et al. 2017:3). The reverse logistics process is usually initiated by requests for returns communicated up the supply chain. The goods are delivered to a certain supply chain member, such as a seller (Tan & Chanchaichujit 2016:11). Information sharing regarding returns is important, as any miscommunication can cause problems in the supply chain; for example, a fluctuation in supply may occur because of miscommunication resulting in stock returns throughout the supply chain, causing a loss in profit (Tan & Chanchaichujit 2016:11). Product returns can stem from various entities in the supply chain, namely customers, manufacturers or distributors (Lamber, Riopel & Abdul-kader 2011:562). Product returns are the prime makeup of the reverse logistics process and can form an additional number of consecutive processes. These processes include repairs, repackaging for restock or resale, recycling and disposal (Bernon et al. 2011:491; Silva et al. 2013:379).

Reverse logistics is a more complex operation to manage than forward logistics because of the multiple different activities occurring (Amini 2009:368). Forward logistics is associated with material flow starting at raw materials and ending at the customer, while reverse logistics is associated with used materials and products coming back up from the final customer to the manufacturer or supplier (Govindan & Soleimani 2017:373). The complexity of the reverse logistics process stems from the quality of returned goods and more manual processes than forward logistics. Forward logistics activities have a more standardised process with better quality goods and opportunities for scale economies (Panjehfouladgaran & Lim 2020:1451). Multiple studies have shown that the reverse logistics process can potentially improve forward logistics performance and reduce the possibility of risks occurring (Govindan & Soleimani 2017:376; Kocabasoglu, Prahinski & Klassen 2007:1141).

Omni-channel reverse logistics risks can stem from internal events created from certain internal managerial decisions, while external events are uncontrollable events in the industry in which the firm operates (Hoejmose, Roehrich & Grosvold 2014:80). A firm needs to control these external and internal risks to maintain profitability and efficiency in business (Aqlan & Lam 2015:5640). Table 1 shows examples of sources of risk that stem from omni-channel reverse logistics.

The omni-channel reverse logistics risks identified stem from multiple different practices in the supply chain and no firm is immune to these risks. To combat these risks, a reverse logistics risk management process should be implemented (Panjehfouladgaran & Lim 2020:1450). Risk may affect the successful implementation of reverse logistics, making risk management an essential aspect for firms (Scheibe & Blackhurst 2018:43). Reverse logistics risk management stems from supply chain management, reverse logistics and SCRM, which is the basis for reverse logistics risk management (Panjehfouladgaran & Lim 2020:1455). The supply chain risk management process (SCRMP) involves four sequential steps, namely, risk identification, risk assessment, risk mitigation and risk monitoring and is indicated as the primary construction for reverse logistics risk management (Panjehfouladgaran & Lim 2020:1455).

To take advantage or combat various risks, different risk mitigation strategies are needed. Therefore, firms need to understand where resources need to be deployed, as firms cannot control every risk because of limited resources (Fan & Stevenson 2018:217). Adopting certain mitigation strategies can present a firm with cost-saving advantages, as the firm can recover faster than competitors and prevent a firm from losing market share (Mvubu & Naude 2020:7). The intangible benefits of mitigating risk are that firms can save brand reputation and increase customer loyalty (Pradhan & Routroy 2014:353). However, one main drawback is the cost versus benefits received, as some firms implement ostentatious strategies that are expensive but do not receive the expected benefits (Tang 2006:42).

There are multiple mitigation strategies used in reverse logistics including efficient communication channels, design for disassembly, the use of technology, internal inspections and cost allocation. The most prominent strategy is having efficient communication channels throughout the supply chain by conducting regular meetings and having collaborative partnerships (Reeves 2019:64). Firms are using a proactive approach to mitigate risk by creating collaborative relationships with suppliers that are experts in the return process, allowing the firm to learn how to implement the reverse logistics process correctly (Prajapati, Kant & Shankar 2019:3). Firms can reduce risk by designing a product that is easily disassembled and selecting the right location for an effective transportation route, resulting in a more flexible nature (Prajapati et al. 2019:3).

Technology advancements can help mitigate risks in the reverse logistics process. Radio frequency identification (RFID) allows a firm to count the quantities of returned goods at collection points, and the data captured is sent to the central return centre, allowing the firm to cater for expected returned goods (Lee & Chan 2009:9299). This technology has created visibility throughout the supply chain, allowing firms to optimise vehicle scheduling. Transportation and internal inspectors are inspection strategies that can help mitigate the chances of risks occurring in the reverse logistics process. Internal inspectors inspect the goods for damages before the reverse logistics process is implemented, while transportation inspectors guarantee that the mode of transport is up to specific standards (Reeves 2019:71). A cost allocation strategy allows a firm to place specific charges such as claims for damages, extra mileage and stop-offs to the correct parties in the reverse logistics process (Reeves 2019:71). Certain policies will be implemented to ensure that the specific party is liable for the cost. These are generic risk mitigation strategies that can help create a competitive advantage for a firm.

By mitigating reverse logistics risk efficiently and implementing an effective reverse logistics process, a firm can gain a competitive advantage and increase profits, as the return of reuse materials allows a firm to reduce operation costs. Therefore, allowing additional capital to be used in other functional areas of a firm (Panjehfouladgaran & Lim 2020:1450). Creating reverse logistics capabilities, including a closed-loop supply chain and integration, can assist in mitigating risks and transforming returns from a cost centre to a profit centre by improving the productivity of resources, labour and materials (Morgan, Richey & Autry 2016:294). A firm can create these capabilities by acquiring, developing and deploying a firm’s resources in the correct manner, which can translate these resources into specific capabilities that can create a competitive advantage (Dubey et al. 2018:130).

An efficient reverse logistics process that mitigates risks can bring benefits for the firm and for the customer. These benefits include improved customer knowledge and service, reduced waste disposal costs and an increased good corporate image (Hsiao 2014:72). Jayaraman and Luo (2007:57) indicate that by mitigating risks and implementing the correct reverse logistics capabilities, firms can achieve tangible competitive advantages including green product credibility, sales growth and value recovery stemming from used goods, whereas intangible competitive advantages include customer satisfaction, good corporate image and feedback information on product returns.

The study was approved by the University of Pretoria Faculty of Economic and Management Sciences Research Ethics Committee (No u16048467/2021). Before the interviews commenced, participants had to read and sign the informed consent form. The form explained to the participant that all information provided would be treated confidentially and anonymously and included the purpose of the study. The pseudonyms listed in Table 2 were used to protect the participants and their firm’s identities.

The first theme relates to research question one, as it considers the types of omni-channel reverse logistics risks experienced in the fashion retail industry of South Africa during SCDR. The study identified eight omni-channel reverse logistics risk types categorised into internal and external risks.

The second research question aims to understand the types of risk management strategies used to manage omni-channel reverse logistics risk during SCDR. The study identified 11 strategies separated into proactive and reactive strategies.

Research question three relates to the role that mitigating omni-channel reverse logistics risk during SCDR plays in creating a competitive advantage. The following subsections describe how mitigating the risk during SCDR can be beneficial in contributing to a competitive advantage.

Participants stated that mitigating omni-channel reverse logistics risk during SCDR led to an increase in sales growth. When a firm mitigates the risk, the omni-channel reverse logistics process is more streamlined, resulting in less capital spent reversing a good. This is supported by the following quote:

Mitigating omni-channel reverse logistics risk during SCDR increases customer loyalty, as mentioned by participants. This is attributed to an easier return process for the customer, which results in customers wanting to purchase the specific firm’s goods instead of a competitor as it is a less complex and seamless process, increasing the chance of customers continually purchasing from the firm. This is evident in the following quotation:

Furthermore, participants explained that mitigating omni-channel reverse logistics risk during SCDR increases the likelihood of value recovery, contributing to a competitive advantage. This is because of goods returning to the warehouse and being used as material for future goods, resulting in lower manufacturing costs. This is clear in the following quotation:

The findings extend the literature of Pradhan and Routroy (2014:353) as mitigating omni-channel reverse logistics risk during SCDR can increase customer loyalty as the process is less complex, which was only stated in a reverse logistics context before. The study confirmed and expanded the work of Jayaraman and Lao (2007:57) who stated that by mitigating reverse logistics risk, value recovery could occur resulting in lower manufacturing costs that can contribute to a competitive advantage this can now be seen in a omni-channel environment as well. Lastly, the study found by mitigating omni-channel reverse logistics risk during SCDR sales growth can occur as there is a more streamlined process.

The aim of this study was to identify the types of omni-channel reverse logistics risks during SCDR and understand the strategies used to mitigate omni-channel reverse logistics risk and whether mitigating the risk can contribute to a competitive advantage.

The first research question identifies the types of omni-channel reverse logistics risks during SCDR in the chosen context. The findings confirm the work of Senthil et al. (2018:718) and Hoejmose et al. (2014:80), explaining that the types of omni-channel reverse logistics risks are financial, staffing skills and inventory that can be categorised as either internal or external to a firm. Furthermore, this study expands on the current literature by identifying additional types of omni-channel reverse logistics risks during SCDR, including information, product-related, customer service and compliance. Pilferage was a significant contributor to inventory risk and was unique to the South African context.

The second research question aimed to identify the types of risk management strategies used by managers to mitigate omni-channel reverse logistics risk during SCDR. The study identified multiple strategies that were categorised as proactive and reactive strategies. The study confirms various strategies existent in literature and expands on these strategies in the omni-channel environment during SCDR. These strategies include using technology, having a collaborative relationship before SCDR and implementing specific checks and standards before dispatch (Lee & Chan 2009:9299; Prajapati et al. 2019:3; Reeves 2019:71). Additionally, managers in the South African fashion retail industry try to mitigate omni-channel reverse logistics risk during SCDR by designing packaging in such a way that the customer can use the same packaging to return a good and the good is protected from being stolen because of certain safety measures (Prajapati et al. 2019:3). The study identified additional strategies including standard operating procedures, skilled staff, problem-solving culture, customised policy changes and disruption-specific reverse logistics teams.

The third research question explored the role of mitigating omni-channel reverse logistics risk during SCDR and contributing to a competitive advantage. The research conducted in this study demonstrates that by reducing the risks associated with omni-channel reverse logistics, customer loyalty can be enhanced. This is attributed to the simplified and user-friendly nature of the process, which aligns with and builds upon the findings of Pradhan and Routroy (2014:353). Moreover, the study validates and extends the findings of Jayaraman and Lao (2007:57) by highlighting that mitigating omni-channel reverse logistics risk can generate value recovery. This is accomplished through the reuse of goods as raw materials, resulting in cost savings that can be allocated to other areas. The study identified that sales could increase because of mitigating omni-channel reverse logistics risk, thus contributing to a competitive advantage. The study contributes to existing literature by identifying these aspects in an omni-channel context during SCDR.

Therefore, three theoretical implications are identified in this study. Firstly, the findings expand on the current literature by identifying additional types of omni-channel reverse logistics risks during SCDR and confirming existing types of risks in literature. Secondly, the study confirms and expands on strategies used to manage reverse logistics risk during SCDR and identifies that in a South African context, the safety of protecting a good from pilferage is extremely important during SCDR. The study further contributes to existing literature by identifying these strategies to mitigate the risk in both an omni-channel environment and an SCDR context. Thirdly, the findings confirm that mitigating reverse logistics risk can contribute to a competitive advantage by creating customer loyalty and increase value recovery. A new finding is that sales can increase by mitigating omni-channel reverse logistics risk. The study contributes to existing literature by identifying how mitigating reverse logistics risk can create a competitive advantage and can now be expanded into the omni-channel environment and the SCDR context.

Firstly, the findings contribute to identifying types of omni-channel reverse logistics risks during SCDR in the South African fashion retail industry. Therefore, managers can identify these risks more easily during SCDR in the omni-channel reverse logistics process and understand how these risks can potentially affect a firm during SCDR. Thus, managers will have a more in-depth understanding of how these omni-channel reverse logistics risks can affect a firm and will be able to identify these risks quicker, which will result in a prompt response. Secondly, the findings aid in creating awareness of the importance of managing omni-channel reverse logistics risks between the channels from market during SCDR. Managing the risks can provide various benefits between channels from market if managed effectively and can potentially result in permanent damage between the channels from market if the risks are not managed appropriately. Thirdly, managers in the South African fashion retail industry can use the various proactive and reactive strategies in the findings to manage omni-channel reverse logistics risk during SCDR. Thus, managers can determine which strategies are most appropriate to the firm and potentially implement these strategies to help mitigate omni-channel reverse logistics risk during SCDR. Lastly, managers can use the findings to understand how mitigating omni-channel reverse logistics risk can help create a competitive advantage for firms. This means that by managing the risks adequately, a manager may see that a firm can create a better competitive advantage, which may cause better market share than competitors. The way mitigating omni-channel reverse logistics risk can help create a competitive advantage is by helping retain customer loyalty, value recovery and an increase in sales. Therefore, managers can now understand how to contribute to creating a competitive advantage by mitigating omni-channel reverse logistics risk.

Because of the qualitative nature of the study, only the participants’ opinions on the types of omni-channel reverse logistics risks and risk management strategies used during SCDR were obtained. Thus, the study did not measure the extent to which these strategies and types of omni-channel reverse logistics risks during SCDR are practically feasible. This means that future research should use a quantitative research design to determine which types of omni-channel reverse logistics risks have the largest impact on a firm and which risk management strategies are the best to use during SCDR. Furthermore, limiting this study to a South African context limits the study’s findings to perspectives of only one country. Therefore, future research should be conducted in other developing countries to ensure consistency and transferability in the findings. The study was only conducted with large firms; therefore, a future study can be carried out on small-medium firms to see whether the findings are similar across multiple sized firms. Furthermore, this study was conducted in a single industry. Future investigations may include other retail settings. In addition, future research needs to attempt to create a deeper understanding of which risk management strategies contribute most to effectively mitigating omni-channel reverse logistics risk during SCDR and creating a competitive advantage. Case studies can be conducted at certain firms to see how the firms have been affected by omni-channel reverse logistics risk and determine which strategies contributed most to mitigate the risk during SCDR and helped create a competitive advantage.