On November 1st, I went to the local supermarket to find the mums and pumpkins stashed away, and the Christmas trees out in all their red, green, and gold glory. Even though the term “Christmas Creep” was first used 30 years ago, it truly does seem like the holidays, and holiday shopping, starts earlier and earlier each year. What we know definitively is that holiday returns have been trending earlier each year.
In 2016, UPS designated January 5th as National Returns Day—the day when the most packages are sent back to retailers—predicting 1 million packages would be returned on that day. Since then, the volume of packages being delivered has steadily risen. In 2018 National Returns Day happened before Christmas with consumers sending back 1.5 million packages 6 days before Christmas, a result of customers taking advantage of early-season sales and retailers making the returns process significantly more seamless for customers. Last week, UPS released its annual predictions for National Returns Day 2019:
According to eMarketer, 2019 is the first year that US Holiday Sales will surpass 1 trillion, and it’s easy to see dollar signs as those sales flow in. But, given these growing returns spikes, it’s important to prepare accordingly. Since four of the top five most returned holiday gifts are classified as apparel, fashion and apparel retailers are particularly vulnerable to taking a bottom-line hit this time of year. All signs point to retailers needing real solutions to minimize the harmful impact of returns. Some things to consider:
Returns are such an important factor in customer experience. Not only do most consumers look at return policies before deciding to make a purchase, but consumers are also significantly less likely to shop again with retailers who have cumbersome return policies and processes. When someone returns a gift to your store, it may be the first time they’re ever interacting with your brand. Consider optimizing your holiday return process for gift returners by doing things like:
While many items being returned during the holiday season are unwanted gifts, many people are still shopping for themselves this time of year. That means issues of damaged goods, incorrect item shipped, and inaccurate product descriptions still occur frequently. To ensure you can resolve those issues in a timely manner (by pulling stock for review or adjusting website copy and imagery, etc.), returns data needs constant analysis. Waiting until an end-of-holiday postmortem to review sales and returns data is a missed opportunity to prevent returns from escalating out of control.
Reducing returns is possible. And even a 1% reduction leads to significant savings for retailers. Don’t believe me? Check out our Returns Reduction Calculator and see how much your business can save. A comprehensive returns reduction strategy includes policy development, process development, and creation of insightful return reason codes. From there, it’s important to have the means in place to determine the root cause of returns and institute meaningful action to reduce returns spikes. Newmine is working with several retailers to revamp their returns reduction efforts for 2020. Part of this entails a historical, 2-year retrospective of returns data called a Look Back Analysis. Reviewing the past gives our clients a view of Y-O-Y sales and returns trends like they never had before and allows them to keep an eye on products that may have been returned frequently in the past.
Just like Christmas Creep, returns can’t be completely avoided around holiday. But with a sound strategy and a positive perspective, retailers can minimize the negative financial impact of holiday gift returns.