Why Returns Could Be Good For Retailers

‘Tis the season for…returns? 

Much of the focus over the holidays is on how much shoppers spend at retail and ecommerce but there’s another annual ritual – no less significant – that fails to draw as much attention: returns. 

Average return rates vary widely by industry, sales channel and product category. For instance, CNBC reported that online orders of clothing and shoes tend to have the highest return rates of up to 40%.

Since fragrances are popular for gifting, we looked into our luxury cosmetics data set to analyze the rate of returns in France during and after the holiday period. Returns of unwanted items tend to be stable throughout the year, averaging out at around 3% of sales every month.

But once you look at returns on a daily basis, there’s a particular date on which the numbers skyrocket. In the US, January 2 has been dubbed as “National Returns Day” but in France, shoppers clearly waste little time as December 26 is the biggest day of the year for returns. In fact, returns on this day tend to be more than four times higher than on January 2. 

Returns offer an untapped opportunity

The surge of returns doesn’t necessarily mean calamity for retailers. Instead, they can see the increased traffic as another opportunity to engage customers and encourage additional purchases while they’re in store.

You’d think it would be hard for shoppers to pass up on all the deals offered during the post-holidays markdowns. But interestingly, our data shows that sales on December 26 are among the lowest in December, even dipping below sales from December 27 to 29.

It means there’s still room for sales growth on this busy day. A study by marketing technology company Valassis found that 94% of consumers said they are more likely to buy from retailers offering a smooth returns experience, and 36% said that means quick in-store returns. 

Naturally, people would be less inclined to browse around the store if they’ve just had to endure waiting in line for half an hour to return an item. It sounds obvious but many retailers often fail to create dedicated in-store points for returns to make the process as quick and easy for customers as possible.

It’s clear that the post-holiday return season presents yet another opportunity for retailers to interact and engage with customers – because today’s experiences can drive tomorrow’s purchases.

About our data:

Suburbia partners with companies in the payments and retail industries to create data sets that track anonymized purchases across Europe, delivering a daily view into some of the world’s biggest consumer brands. For insights on consumer spending on luxury cosmetics and fragrances, Suburbia’s data set covers sales in over 130 retail outlets across France. Find out more about it here

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