Insights | Blog
Retailers Brace for Holiday Returns
The holidays are in full swing, and a new year is fast approaching. Which means an onslaught of holiday shopping both in-store and online.
Even with credit card balances and rates at an all-time high, shoppers are expected to spend more during this year’s holiday.
However, with an increase in sales, along comes a heavy volume of returns.
Managing returns continues to be a major challenge for retailers.
Last year, according to the National Retail Federation, retailers lost an estimated $816 billion in revenue as a result of consumers returning 16.5% of merchandise purchases in the U.S. alone.
With excess inventory, comes markdowns, warehousing, and carrying costs.
Unfortunately, many retailers end up discarding over 25% of their returns which ends up being over 5 billion pounds of goods that end up in landfills a year.
Companies are continuously seeking alternatives to mitigate the high costs of returns and their environmental impact.
From adopting the “just keep it” approach to the “try before you buy”, implementing return and restocking fees, and to no surprise, artificial intelligence tools.
It’s clear that returns pose a substantial challenge, however, there’s an opportunity for retailers to evaluate their relationship with consumers beyond the initial sale of the product.