06/15/2021 | News release | Distributed by Public on 06/15/2021 12:22
Economic Implications
It's no secret that returns, and the cost of processing them, can be massively detrimental to a retailer's financial health. In 2020, returns totaled $428 B in North America[2]. That's 10% of all retail trade. Incisiv surveyed retail executives for their 2021 State of the Industry Report, Retail Returns and found that 84% believe there is a significant ROI in reducing returns, and the majority of those surveyed believe there is an opportunity to reduce return rates by an average 31%. With every $1M in returns reduction adding $0.5M to the bottom line, addressing returns can be one of the 'lowest hanging fruits' when it comes to making improvements to top and bottom lines and margin.Emotional Relationship with Your Brand
Much of the contemporary discourse around returns espouses the ways in which a positive returns experience contributes to customer loyalty, and with good reason: 95% of customers say a poor returns experience will make them less likely to shop from a brand again. However, consider the following insights:Environmental Sustainability
The majority of North American consumers believe it's important for a brand to be sustainable or eco-friendly -taking into account the environment as part of your strategy has never been more important. Product returns have an adverse effect on the environment in a couple key areas, including landfill waste and carbon emissions. Reverse logistics provider Optoro estimates that 5 B pounds of returned goods end up in landfill annually and that 16 million metric tons of carbon dioxide were emitted from the transportation of returns in the US last year. Proactive retailer intervention can make a significant dent in reducing returns and subsequently reducing waste and carbon emissions, making the strong case for returns reduction as part of your sustainability strategy.The ripple effect of returns makes waves across these three dimensions. By allowing product returns to continue to escalate, the industry is losing $125 B annually, risking customer churn and brand reputation, and putting undue stress on our vulnerable planet. Rampant returns are an indication that there are errors or inefficiencies that need to be addressed throughout the business. It's time to address the industry old problem, rather than viewing it as a cost of doing business.
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