67 million Christmas gifts to be returned this year according to new Manhattan Associates research

British consumers are expected to return £1.5 billion worth of unwanted Christmas gifts this year, highlighting the significant logistical and financial challenges facing retailers in the post-holiday period, according to research by Manhattan Associates.

The company surveyed 2,000 Brits for this.

From ill-fitting clothing to duplicate gadgets, gift returns initiate a complex reverse logistics process, with an estimated 67 million presents expected to be returned this year.

This puts immense pressure on retailers, warns Craig Summers, VP Northern Europe & MEA at Manhattan Associates. "Efficient returns management is vital during peak holiday season as businesses balance the need for streamlined processes with maintaining customer satisfaction." 

The research found that:

·         Almost 23% of Brits exchange unwanted gifts for something else

·         21% donate unwanted gifts to charity shops

·         19% regift unwanted presents to new recipients

·         17% store unwanted gifts away, often in cupboards

·         12% return unwanted gifts for a full refund

The most common Christmas gifts returned include clothing (42% of consumers have returned), shoes/footwear (21%), cosmetics (16%) and jewelry or watches (15%)

The returns process is a common source of frustration for consumers, with 39% citing long refund waits and 33% pointing to unclear policies as major pain points. These issues have real consequences for brands, with 40% of consumers saying they would avoid a retailer after a difficult returns process. "A seamless and customer-centric return experience is essential for building trust and fostering long-term relationships," adds Summers.

This challenge is particularly pronounced among Gen Z shoppers, who returned gifts at a much higher rate (65%) last year than their older counterparts (19%) among those aged 65+. Given Gen Z’s focus on sustainability, brands face additional pressure to not only streamline their returns, but also minimise the environmental impact of the process too.

Retailers are walking a tightrope. They need to meet customer expectations for easy returns while also managing the significant logistics of processing millions of items which erodes valuable bottom-line profits.

Summers comments: "investing in solutions such as robust reverse logistics and AI powered customer service, coupled with clear communication and efficient processes, is crucial for retailers navigating this challenge effectively."

“There’s more to returns than software and pound signs though. Retailers need to also consider the emotional aspect of returns. Customers often feel awkward or disappointed when returning gifts, and a smooth, empathetic process can make all the difference in maintaining loyalty and a positive brand experience."

2024 RTIH INNOVATION AWARDS

Returns were a key focus area at the sixth edition of the RTIH Innovation Awards.

The awards celebrate global tech innovation in a fast moving omnichannel world.

Our 2024 hall of fame entrants were revealed during an event which took place at RIBA’s 66 Portland Place HQ in Central London on 21st November, and consisted of a drinks reception, three course meal, and awards ceremony presided over by comedian Lucy Porter.

In his welcome speech, Scott Thompson, Founder and Editor, RTIH, said: “The event is now into its sixth year and what a journey it has been. The awards started life as an online only affair during the Covid outbreak, before launching as a small scale in real life event and growing year on year to the point where we’re now selling out this fine, historic venue.”

He added: “Congratulations to all of our finalists. Many submissions did not make it through to the final stage, and getting to this point is no mean feat. Checkout-free stores, automated supply chains, immersive experiences, on-demand delivery, next generation loyalty offerings, inclusive retail, green technology. We’ve got all the cool stuff covered this evening.”

“But just importantly we’ve got lots of great examples of companies taking innovative tech and making it usable in everyday operations - resulting in more efficiency and profitability in all areas.”

Congratulations to our 2024 winners, and a big thank you to our sponsors, judging panel, the legend that is Lucy Porter, and all those who attended November's gathering.