Soaring e-commerce holiday sales will lead to surge in returns


December 9, 2020 | By RetailME Bureau

Holiday e-commerce sales grew by a record 14% last year to $167.8 billion. 2020 will shatter that record with a projected 40% increase to $234.9 billion, putting e-commerce’s share of total retail sales at 32%, according to CBRE Research.

Supply chains will be tested as retailers handle a record number of returns. Brick-and-mortar retail return rates typically average between 8% and 10% of total sales throughout the year, according to eMarketer. Total holiday retail sales (November and December) are expected to reach $741.2 billion this year, up just 1.5% year-over-year.2

The surge in e-commerce demand this holiday season will lead to a corresponding spike in returns, according to Optoro, a reverse logistics software provider. E-commerce sales have a much higher average return rate of up to 30%, and this is even higher during the holiday season. With a projected $234.9 billion in online holiday sales this year, e-commerce returns will be at least $70.5 billion—a 73% increase from the previous five-year average.

Return Costs for Retailers Vary by Product Type

Amid the COVID-19 pandemic, consumers are doing more online shopping for products that support a stay-at-home environment. Optoro’s online proprietary marketplaces, BLINQ and BULQ, have seen an increase in purchases of toys, baby items, electronics, cleaning supplies, appliances and health & beauty goods.

Knowing which products are purchased online is important for a retailer’s bottom line, as different products have varying levels of depreciation. For example, Optoro estimates that the value of fashion apparel depreciates by 20% to 50% over an eight-to-16-week period, creating urgency to get returned items back up for sale.

Apparel retailers likely will see the biggest rise in reverse logistics costs as many customers buy several of the same items to try on and return the ones that don’t fit. Apparel has the highest return rate for online purchases, from 30% or as much as double that of in-store purchases.

Other typical gift-giving segments, such as electronics, small appliances, jewelry and accessories, may see higher reverse logistics costs due to the need to inspect, test, wipe customer data, reimage and sometimes repair for warranty purposes. Electronics are prone to quickly lose value since rapid innovation leads to new models of the same product.

There likely will be an increase in the giving of physical gifts this year, with less giving of experience-related gifts like tickets to concerts and sporting events due to pandemic-related restrictions.

Comments

comments

Previous Article Next Article

YOU MAY ALSO LIKE /



Nando’s has revealed their revamped Sheikh Zayed Road outlet where newcomers and 

Continue Reading

July 8, 2021 | By Jibran Chouguley

UAE-based Al Maya Group announced that it will be boosting import of 

Continue Reading

June 24, 2021 | By RetailME Bureau

UAE-based grocery retail chain, Grandiose has opened its first hypermarket in Abu 

Continue Reading

June 2, 2021 | By RetailME Bureau

UAE-based Carrefour announced its theme and plans for Ramadan 2021. The brand 

Continue Reading

March 31, 2021 | By RetailME Bureau

Locally owned supermarket Spinneys celebrates 60 years of doing business in the 

Continue Reading

March 9, 2021 | By RetailME Bureau
Almarai, Carrefour, Emirates have the most loyal customers

UAE-based Carrefour will become the first retailer in the region to offer new levels 

Continue Reading

February 22, 2021 | By RetailME Bureau

The Organic Farmers’ Market is back in Bay Avenue for its 12th 

Continue Reading

February 17, 2021 | By RetailME Bureau

UAE-based  Lulu Group recently inaugurated its first-ever all-female staff store in Jeddah, 

Continue Reading

February 15, 2021 | By RetailME Bureau
Jones the grocer

Jones the Grocer, the gourmet grocer and cheese retailer launches the Jones 

Continue Reading

February 1, 2021 | By RetailME Bureau

UAE-based Al Maya Supermarkets is hosting a two-week food festival at select 

Continue Reading

January 17, 2021 | By Lawrence Pinto

Locally-owned supermarket Spinneys has launched its ‘Power of Plants’ initiative in the 

Continue Reading

January 17, 2021 | By RetailME Bureau
Cookit

Carrefour UAE has launched “Cookit Yourself” — a curated recipe box created 

Continue Reading

January 5, 2021 | By RetailME Bureau




Download Images RetailME Magazine