Generous returns policies have encouraged shoppers to buy online, but an unsustainable wave of returned goods is forcing retailers to rethink their strategies.
Retail returns surged over the past three years, far outpacing the unprecedented growth in ecommerce sales. As retailers struggle for profitability amid ongoing economic uncertainty, they must manage the costs of returns without losing customers.
Key Question:How can retailers limit their ecommerce return costs while still meeting consumer expectations?
KEY STAT: Overall retail return rates will grow just 2.2% this year, following rapid growth during the height of the pandemic. But ecommerce returns will stay above pre-pandemic levels throughout our forecast period.
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Executive Summary
Returns surged during the pandemic-fueled ecommerce boom, but some relief is in sight.
Online purchases will account for a growing share of total US retail returns.
Apparel and accessories lift overall return rates for ecommerce.
Problems with size, color, and fit drive online returns.
Bracketing is on the rise, especially among younger shoppers.
The use of third-party drop-off locations for returns is growing.
Consumers prioritize free returns above all else.
Consumers are willing to pay for convenient returns.
Physical locations offer incentives for in-person returns.
Shipping costs are the top challenge for retailers.
Rising returns fraud is adding to retailers’ costs.
What should retailers do to reduce and manage ecommerce returns?
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Generous returns policies have encouraged shoppers to buy online, but an unsustainable wave of returned goods is forcing retailers to rethink their strategies.
US Retail Return Penetration, Ecommerce vs. Non-Ecommerce, 2020-2026 (billions, ecommerce % of total retail returns, and non-ecommerce % of total retail returns)
US Retail Return Penetration, Ecommerce vs. Non-Ecommerce, 2020-2026 (billions, ecommerce % of total retail returns, and non-ecommerce % of total retail returns)