1010data Holiday Returns: How Scared Should Retailers Be
Data Reveals More Online Purchases Are Returned Than Brick and Mortar Purchases
1010data, a leader in analytical intelligence and marquee provider of consumer path to purchase and alternative data streams for the retail, consumer goods and financial services industries, released the fourth in a series of holiday reports analyzing consumer trends, both past and present. The 2019 Holiday Flash Report: Holiday Returns explores the impact of holiday returns on both retailers and brands. Utilizing proprietary data streams and enhanced attribution detailing the path to purchase of millions of US customers during the past holiday periods, the study delves into the complexity of the return season that will soon be upon us.
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Returns are considered by retailers to be a cost of doing business. However, as online sales have increased, so have returns, and online returns have come at a higher cost than brick and mortar returns. Significantly, the report finds that more online purchases are returned than physical purchases: year to date through November 2019, Amazon saw a 6 percent return rate on net spend, while Walmart had only 2 percent. For the Gap, online sales from 2015-2018 were returned at a rate four times higher than in-store sales.
Numerous aspects factor into the losses associated with returns, from additional postage and restocking, all the way to the risk of not being able to resell the item at its original cost, at a discount, or at even all. However, it’s not all dire news. The silver lining is that returns can hold an important place in the lifespan of the retailer-consumer relationship. The report examines this hypothesis, detailing the opportunity to create a positive outcome out of a negative situation, highlighting the Kohls/Amazon relationship as one example.
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“Looking across multiple retailers, there’s a considerable discrepancy in volume of returns by category, as well as channel. For example, you have Gamestop with a return rate of only 2 percent for full year 2018, while J. Crew hit 26 percent that same year,” noted Andy Mantis, Chief Business Officer of 1010reveal. “And there’s much that the online channel can learn from brick and mortar about reducing these volumes. While the return of holiday purchases are a large part of retail’s $351 billion annual problem, we discovered these returns, particularly those in-store, can be put to positive use, if retailers understand how to capitalize on them.”
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