Holiday Sales: “Many Happy Returns”

retHere’s an interesting statistic coming out of the holiday season this year: Nearly one in four consumers has returned at least one of the gifts they received.

For gifts purchased online, returns are an even bigger part of the equation – as in one third of all online gift purchases being returned.

It’s part of a trend that’s growing at a pretty swift pace. In 2014, a total of $285 billion worth of merchandise was returned in the U.S., a 6% increase over the previous year and more than double the growth rate of retail sales as a whole.

Industry observers are expecting higher figures again for 2015 once the stats are fully tallied.

Which holiday gift items tend to be returned most often? In a survey of ~500 U.S. consumers conducted between December 28 and 31, 2015 by mobile app shopping circular developer Retale, the following gift categories were cited most frequently by respondents:

  • Jewelry: ~32%
  • Electronic products: ~29%
  • Gift cards: ~27%
  • Clothes/apparel: ~26%
  • Home décor/home improvement items: ~23%

Consumers may have gravitated to online shopping big-time this past holiday season, but as for the gift return “experience,” it’s pretty clear that consumers continue to prefer making a return at the store (~64%) rather than online (~12%).

Evidently, the “hassle factor” of shipping merchandise back to the seller – not to mention the cost of return shipping if that isn’t offered free of charge – is more onerous than getting in the car and driving to the store outlet.

As for the mountains of merchandise that retailers are having to deal with, it’s caused the growth of an entirely new business niche: reverse logistics firms.

These companies input information on each returned item and determine the most lucrative way for the retailer to dispose of it – which can include sending it to a wholesaler, selling it to a liquidator for scrap, or sending it to a distribution center to be repaired and resold.  Online “refurbished products” stores on Amazon and eBay enable retailers realize up to 70% of an item’s worth by selling those items directly to value-conscious consumers, compared to recouping only 20% or 30% in the past.

It’s part of the action –> reaction aspects of retail that pretty much define this industry.

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