http://www.ft.com/cms/s/0/eedfc436-8e76-11e4-ac79-00144feabdc0.html#axzz3NExHHBJxDecember 28, 2014 5:47 pm
Christmas returns hit new high
Joel Lewin
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http://www.ft.com/cms/s/0/eedfc436-8e76-11e4-ac79-00144feabdc0.html#ixzz3NExVXFadA record number of unwanted Christmas goods will be returned this year, but eretailers are not equipped to cope, logistics experts have warned.
Approximately 30m unwanted goods worth a total of £500m will be returned during the holiday period this year, according to research by LCP Consulting, a logistics consultancy.
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http://www.ft.com/cms/s/0/eedfc436-8e76-11e4-ac79-00144feabdc0.html#ixzz3NExZ5Ya6Most of these will be returned on so-called “Boomerang Thursday” — the first Thursday after Christmas, when a deluge of unwanted gifts will be sent back to ecommerce companies.
“The growth of ecommerce has been astronomical, but the processes to support the returns part of ecommmerce hasn’t matched it,” said Nila Patel, business development manager at Norbert Dentressangle, one of the UK’s largest parcel carriers.
Across ecommerce, returns average 15-20 per cent, although fashion eretailers see much higher rates of up to 50 per cent.
CollectPlus, the parcel delivery operator, has estimated that 31 per cent of goods purchased online this Christmas will be returned.
While companies often focus on growing sales, they can neglect the returns side of the operation, according to Alan Braithwaite, chairman of LCP Consulting.
“Even some of the big retailers are not very well equipped to handle returns,” he said.
Record levels of online sales have already caught out eretailers and logistics operators this year, with carriers including Yodel, and high street retailers, including Argos and Marks and Spencer, suffering delays. Experts are warning customers to expect further waits for refunds.
“Returns are going to be delayed and customers are going to be upset they’re not getting their money back,” said Ms Patel.
If the returns process is delayed, then there is an additional problem of the item potentially losing its value, particularly for fashion retailers.
“Returns can obliterate 5-10 per cent of their [eretailers’] revenue through mark downs and price reductions,” said Mr Braithwaite.
Yet while the returns process poses an obstacle to eretailers, it presents a lucrative opportunity for logistics companies.
Norbert Dentressangle has seen its UK returns business take off in recent years. The company handled 17.7m returns in 2014, up from 13.1m last year and more than double its 2010 volume.
“It’s more complex and less glamorous,” said Ms Patel. But “that’s where the market will grow”.
