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

Is Europe buying into Black Friday?

Singles’ Day may be the biggest shopping day of the year but it has yet to really catch on in Europe. 

Meanwhile, Thanksgiving may be a uniquely American holiday but Plymouth, Massachusetts’ oldest celebration is going global. The shopping frenzy that takes place the day after the turkey has been gobbled up, otherwise known as Black Friday, has spread across the Atlantic and beyond. 

Now, Black Friday is seen as the biggest pre-Christmas sales event by retailers the world over. While turkey and pumpkin pie may not be universal, the love of scoring a good deal transcends borders.

Black Friday was virtually unheard of in Europe before the 2010s. Then the likes of Amazon aggressively marketed it and soon, other merchants started vying for a share of consumers’ wallets with tempting deals.

But is it possible that some are growing tired of participating in the retail madness and are jumping off the bandwagon?

In France, Black Friday first made its arrival felt in 2012 but it did not take off immediately. The French had to get used to the idea of shopping outside the legally designated summer and winter sales periods. But it has grown rapidly in recent years.

As consumers tend to go for higher value products on Black Friday, we looked at our luxury cosmetics and fragrances data to see the retail event’s impact on sales in France over the years.

Based on our data, 2017 appeared to be a breakout year for Black Friday in France, with a whopping 134% year-on-year (YOY) growth in sales. However, in 2018, YOY growth paled in comparison at 20%. What does this mean for Black Friday in Europe’s third largest economy?

Black Friday: Still Relevant?

There could be any number of reasons why Black Friday sales just aren’t growing as fast as they used to. While sales activity continues to peak on the day itself, retailers now tend to run promotions over an extended period to ease pressure on their operations. There is Cyber Monday, although the growth in ecommerce sales on Black Friday have blurred the lines between both.

In addition, the French have long loathed cultural imports, so it was perhaps no surprise when local online merchants developed their own response to Black Friday. “French Days” was launched last spring but it was so successful that it was held twice this year. With the most recent promotions in late September this year, less than two months before Black Friday, this could possibly be spreading consumer dollars thinner. 

But there could be another force at play.

It was recently reported that more than 200 brands in France have decided to boycott the upcoming Black Friday sales as a response to the negative impact of rampant consumerism on the planet. Instead, they are calling for “reasonable consumption” in a bid to “make Friday green again”.

Are these retailers just losing out to competitors during this highly anticipated shopping event? Or is interest in Black Friday hitting a plateau in France?

Let’s see if Black Friday will be bigger than last year, as some predict. Or if the patriotic French prefer to embrace “French Days”, while starting a more sustainable tradition with “Green Friday”.