In this article goTRG COO, Steve Rop, offers insights into how retailers can navigate the holiday season successfully, ensuring a hassle-free shopping experience for all. The holiday season is a joyful time for retailers marked by increased sales. However, it also brings a significant challenge: a surge in retail returns. According to the National Retail Federation, the 2022 holiday season saw a staggering $171 billion worth of merchandise returned, accounting for 17.9% of purchases.
In September 2023, a remarkable shift occurred as 49% of retailers identified returns as a severe problem, marking a nearly 3000% increase from the previous year. Nevertheless, retailers are taking action. A substantial 75% have invested in improving their returns processes, with budgets ranging from $1 million to $5 million, and 90% have increased their investments in this area compared to the previous year.
Return policies during the holiday season traditionally extended to accommodate shoppers. However, this year, only 16.8% of retailers plan to extend their returns window, while 41.8% intend to shorten it. Retailers are becoming more strategic in managing returns to align with their business priorities.
One reason for discouraging returns may be the oversupply of inventory. In goTRG’s survey, 67.4% of retailers reported higher inventory levels compared to the previous year.
Retailers have also extended their sales earlier into the holiday season to mitigate December returns. Amazon's introduction of a second Prime Day in October reflects this strategy, encouraging early shopping and reducing return pressure.
The rise of eCommerce has brought a new dimension to the holiday return challenge, with 48.4% of retailers noting that 11-20% of online purchases are returned. To address this, many retailers are adopting "keep it" policies, allowing customers to retain certain items instead of returning them, thereby reducing logistical costs and enhancing customer loyalty.
Furthermore, supply chain challenges have led 48.2% of retailers to encourage "BORIS" (buy online, return in store) returns this holiday season.
Retailers face challenges posed by high return rates during the holiday season. By adapting return management strategies, leveraging returns management software, and embracing innovative concepts like "keep it" returns and BORIS incentives, retailers can effectively manage returns. Clear policy messaging, staffing, and resale strategies are essential to mitigate the impact of returns during this festive tim
