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As the holiday season winds down, retailers are preparing for a surge in product returns – a phenomenon so significant that January has been dubbed the “pushback.”
In 2024, almost $890 billion About 20% of all purchases were returned, a significant increase from the previous yr, according to a report by the National Retail Federation and Happy Returns. Flexible returns policies increase customer satisfaction, but come at a huge cost to each brands and the environment.
The transportation, labor and logistics required to process returns significantly increase retailers’ costs, with firms comparable to Asos, Amazon and Wayfair attributing major profit losses to the impact of returns.
It’s not only billions in lost revenue at stake: the rise of e-commerce has resulted in an alarming variety of returns ending up in landfills. Every yr 9.5 Billions of kilos of returns – perfectly good, never-used products – pile up in bins due to the operational challenges of processing and reselling returned products.
At the same time, returns are an necessary touchpoint for retailers to positively interact with customers. Flexible returns policies have turn out to be crucial to a successful omnichannel retail strategy that supports customer loyalty and builds brand trust.
Retailers and brands must begin to balance profitability and sustainability as they compete for consumer loyalty and market share.
Increase loyalty without sacrificing profits
According to a report by NRF and Happy Returns, the variety of returns has doubled over the past five years due to changing consumer habits, which was fueled by the rapid change in online shopping habits resulting from the pandemic. E-commerce is expected to cross this line 8 trillion dollars by 2027, retailers saw an increase in sales – and returns – during record-breaking Black Friday and Cyber Monday in 2024. Managing these returns involves high costs and logistical challenges for many brands.
Today’s retailers balance high customer satisfaction with the additional costs and logistics of handling returns. Flexible returns policies encourage brand loyalty, build trust and reinforce positive brand experiences: it is in the best interest of brands to maintain flexible returns.
Solution? Recommerce. This approach allows retailers to maintain a flexible returns policy while managing products more sustainably. Recommerce returns simplifies processing and resale, transforming waste into a latest net value stream. Product returns should not be seen as an unavoidable cost of doing business, but as an opportunity for innovation.
To start, retailers should rethink the entire lifecycle of their products – planning for end-of-life at the starting of the product’s lifecycle. Reverse logistics planning is a key a part of supply chains that helps retailers manage returns while improving their environmental impact.
Investing in reverse logistics systems or working with a returns partner can improve the processing and resale of returned products. For example, Rebelstork is North America’s largest recommerce platform for returns of open-package and bulk baby products and home goods. Built on the principles of a circular economy, Rebelstork goals to revolutionize the returns industry through progressive technology and latest pondering. Working with over 2,500 brands, Rebelstork diverts over 12 million kilos of product from landfills each yr.
Reduce your impact on the environment
Every yr, billions of kilos of returned items – especially in categories comparable to fashion, baby products and homeware – find yourself in landfill. For comparison, this waste accumulation is equivalent 10,500 fully loaded Boeing 747s, that is a terrifying number that has undermined retailers’ hard-earned sustainability goals and multiplied their carbon footprint.
The boom in online and mobile shopping also implies that returns are higher than ever: the problem of returns in retail has quickly turn out to be returns crisis.
There is an urgent need to create return re-trading systems that are not only cost-effective but also environmentally friendly. Recommerce is a very profitable solution that is quickly gaining popularity.
Harness the power of technology to reduce waste
Historically, there has been no foolproof system for efficiently handling returns, but emerging firms are meeting these challenges by developing progressive solutions and breakthrough technologies. For example, Rebelstork has developed its own technology to process truckloads of returned goods and excess inventory on a every day basis. This technology streamlines the flow of returned goods into warehouses, enabling the company to handle more than 70,000 unique units per week.
A win for business, brands and the planet
Small changes to retail systems can increase efficiency, increase profits and promote sustainability. It’s time to turn one of retail’s biggest challenges into a catalyst for positive change.