Returns are a common occurrence in the retail industry, but they come at a high cost. According to a recent report by Appriss Retail, retail returns are a $890 billion problem for retailers worldwide. This staggering figure highlights the significant impact that returns have on the bottom line of retailers.
There are several factors that contribute to the high cost of retail returns. One major issue is the rise of online shopping, which has made it easier for consumers to make purchases without trying on or testing out products beforehand. As a result, many consumers end up returning items that don’t meet their expectations or fit properly. In fact, the rate of online returns is three to four times higher than in-store returns.
Another factor that contributes to the high cost of returns is the growing trend of “wardrobing,” where consumers purchase items with the intention of using them once and then returning them. This practice not only results in lost revenue for retailers, but it also creates additional costs for restocking, processing, and reselling returned items.
In addition to the financial impact, returns also have a negative environmental impact. Many returned items end up in landfills, contributing to waste and pollution. This is especially concerning given the increasing focus on sustainability and environmental responsibility in the retail industry.
To address the issue of retail returns, retailers need to implement strategies to reduce the number of returns and minimize the impact of returns on their business. This may include improving product descriptions and sizing information to help consumers make more informed purchasing decisions, offering virtual try-on options, and implementing stricter return policies to deter wardrobing.
Retailers can also leverage technology, such as artificial intelligence and data analytics, to better understand consumer behavior and identify patterns that may indicate potential returns. By proactively addressing these issues, retailers can reduce the cost of returns and improve overall profitability.
In conclusion, retail returns are a significant problem for retailers, costing billions of dollars each year. It is crucial for retailers to implement strategies to reduce the number of returns and mitigate their impact on their business. By addressing this issue, retailers can improve their bottom line, enhance customer satisfaction, and contribute to a more sustainable retail industry.