After the crazy busyness of the holiday shopping season comes…the crazy busyness of the returns season. It is estimated that up to 25% of all returns happen in the period between Christmas and the end of January. That’s a quarter of all returns squeezed into around 10% of the shopping year.
The National Retail Federation’s (NRF) figures for the 2021 ‘returns season’ states that up to 13% of total sales in the US were returned – that is over $400 billion of goods. The percentage is higher online – up to 20% of all purchases via ecommerce solutions are returned.
The reasons for returns vary:
Not surprisingly, the biggest source of returns is wearable items – with the top five being clothes, men’s dress shirts, shoes, make-up, sports apparel.
Returns Management: Returns drives sales and satisfaction
Returns management is an integral part of the overall customer experience and your returns policy is therefore an important element. As many as 92% of consumers say they will return to a retailer if they have a positive customer experience with returns, and they can generate an opportunity for cross sell/upsell.
But managing refunds can be costly and time-consuming. NRF tells us that in the US, the cost of managing returns of $400 billion of goods is $101 billion – that’s a massive 25%. It is estimated that in the UK, the average return passes through seven pairs of hands before it is back on the shelf.
In-store vs DC – the pros and cons
But in-store returns can lead to stock imbalances, with more stock of an item than the store would normally hold. So what are the key things that retailers can do to ensure they’re managing returns efficiently?
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