Online retailers set for festive flood of returns

Brits will return over £2.5 billion of online orders to retailers this Christmas, according to LCP Consulting. The majority will be sent back between mid-December (following Black Friday) to mid-January.

Stuart Higgins, Director – Retail, at LCP Consulting, says: “The price retailers have to pay for online growth is pretty substantial. Not only will this flood of returns put additional demands on retailers back-end operations during their busiest online sales week of the year, it will also impact their stores as a third of returns will come back into stores just as they’re launching their Christmas and January sales.”

Customers return items for a variety of reasons including; the wrong item was purchased, the product is no longer needed, the product didn’t match its description, a gift purchase was incorrect, the product was damaged on arrival, or the retailer shipped the wrong item. Another reason is that the customer engaged in wardrobing. Higgins says: “Most retailers do not want to publicly accept that wardrobing happens, but it is a reality they have to deal with. At this time of year wardrobing can be seen when a party dress worn for the office Christmas party is returned. It is virtually impossible for retailers to prevent wardrobing, but some are starting to make inroads by using data and analytics to identify repeat returns in order that these customers can be prevented from ordering in future.”  

Retailer returns processes are improving, but LCP Consulting’s annual survey of leading retailers continues to highlight that returns speed/efficiency ranks less important in the minds of retail directors than other supply chain factors. “This is surprising given that 70% of consumers say that returns capability is top of mind when selecting where to buy from online. With online returns exceeding £2.5 billion from this year’s festive shopping period, forward-thinking retailers need to ensure that they’re operating fast efficient, customer-centric returns processes so customers get their cash back faster – an important part of over customer satisfaction,” Higgins concludes.