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08/20/2021

Survey: Retailers boost spending on returns management

Dan Berthiaume
Senior Editor, Technology
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An online returns processing center.

Retailers are seeing an increase in returned items, with the growth of e-commerce a likely culprit.

According to a new global survey on consumer and retailer trends in e-commerce and returns from pure-play contract logistics provider GXO Logistics Inc., there appears to be a link between increased e-commerce activity and higher returns volumes. The need for global reverse logistics has also been projected to increase substantially by the National Retail Federation (NRF), which predicts spend in this area will rise to $604 billion by 2025.

More than seven in 10 (72%) of surveyed retailers are investing in their returns management processes, and more than one-quarter of surveyed retailers recently invested in additional warehouse space. More than one-third (36%) of retailer survey respondents said that in the past 12 months, online returns have increased. Another 37% of surveyed retailers said returns have increased their operational costs. 

Meanwhile, 42% of surveyed consumers said they have returned a piece of apparel online in the past 12 months. Close to six in 10 (57%) consumer survey respondents said having a sustainable returns program is an important factor when making a purchase online.

“We’re seeing a rapid increase in outsourcing from retailers,” said Richard Cawston, president, Europe, GXO. “They want to de-risk their supply chains. They’re looking for a technologically advanced logistics partner with scale to support their e-commerce growth, including a rising need for returns management that requires specific expertise in technology to optimize inventory.”

Dan Nevin, chief revenue officer, global retail, of consumer fulfillment/returns technology platform Doddle, recently shared insights on reducing the cost of e-commerce returns with Chain Store Age. Citing results of a Doddle consumer survey showing that 75% of respondents felt retailers should be doing more to improve their returns experiences and that a positive returns experience would encourage respondents to shop with the same online retailer again, Nevin advised retailers to take steps including restock and resell more rapidly with a digital returns portal providing a means to follow up on the goods after they’ve arrived with the customers with appropriate messaging.  

Nevin also said retailers should also treat different kinds of returns differently, using rules-based intelligence technology to control reverse shipping. Rules-based smart solutions can capture the reason for a return and automatically trigger the application of the right method and destination. Other suggested steps include digitizing the typically manual process of collecting returns data to directly connect customers with the warehouse, and pushing alerts digitally to customers at every stage of their return to create proactive communications.

The findings noted in the GXO summary are informed primarily by the results of two surveys commissioned by GXO and conducted by Statista. The retailer statistics were derived from 360 respondents representing companies of various sizes in the US, UK, France and Spain. The consumer statistics were derived from approximately 4,000 respondents from various demographics. The findings were complemented by GXO’s internal data and contextual information from outside sources.