Welcome to retail returns season: the time of year when ugly sweaters, problematic consumer electronics, noisy toys, and ill-fitting shoes make their way back to retailers and manufacturers with few or no questions asked. This season in particular will bring higher return rates due to record-breaking online spending (ecommerce return rates are double that of brick and mortar stores) and heightened consumer expectations of relaxed cross channel returned policies (88% of shoppers review a retailer’s return policy throughout their shopping experience).
Before the rush of returns hits, here are five things you should know:
- 13% of holiday purchases will be returned; that’s $80-90 billion worth of merchandise and a 35% increase from 2015
- It costs twice as much to process a return back-on-shelf as it does to sell it; retailers spend 8% of total sales processing returns
- The top items returned include: graphic tees, specialty kitchen items, small hand tools, electronic toys
- B-Stock processes 60% more items in Q1 (Jan-March); most of it is merchandise that has been returned
- Nine of the top 10 retailers are opting to leverage online marketplaces to sell their returned and other liquidation goods to business buyers
Need more info on that last bullet? In a recent eMarketer article, B-Stock’s CEO, Howard Rosenberg explained how retailers now tend to push more returned goods toward liquidation rather than processing back on shelf. And – when done right – an online marketplace dynamic can fetch 30% to 80% more than traditional liquidation methods. This can make a big difference to margins, post holiday and all year round.
Let’s be honest, unless you have a zero-returns policy – which in today’s retail environment is unlikely – there is no hiding from holiday returns. But, by applying fresh thinking to how you handle them, returns can become a strategic asset rather than a dreaded post-holiday afterthought.
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