As the New Year ushers in a wave of resolutions and fresh starts, it also brings a surge in consumer returns, making January a peak return period for retailers and third-party logistics providers (3PLs). The successful handling of January’s post-peak returns is key.
The holiday festivities and subsequent sales show a substantial return increase due to several prevailing trends, such as:
- Extended Return window: Due to many purchases being gifts, some retailers allow consumers up to 60 days after purchase, way into the next year and month.
- Shopping behaviour: During the holiday period, there is a large increase in ‘wardrobing’ (buying many items to try on at home and then returning them)1. In particular, product categories, such as clothing and shoes, often experience higher return rates.
- Sales-Impulse purchases: Consumers take advantage of the offers and then decide to return them with buyers regret, as items are not needed.
Challenges faced by retailers during January’s peak returns
The high return volumes in January present multifaceted challenges for retailers as it can affect inventory management, revenue, overall business operations and potentially consumer experience.
- Processing returns in a timely manner: With an increased influx, retailers can struggle to process the items and then refunds on time as existing systems and resources are overwhelmed.
- Profit loss of returned stock: Retailers may encounter difficulty reselling stock because certain items, such as seasonal goods or products tied to specific holiday promotions, may have limited market appeal or demand now.
- Damaged items: Items may arrive damaged and require value-added services at an extra cost and delay to both the retailer and consumer.
- Consumer Experience and Rating Review: Ensuring a positive consumer experience becomes increasingly challenging for retailers during this period, especially concerning the processing of refunds. The risk of negative reviews due to dissatisfied consumers is a key concern and issue, which can impact brand reputation and deter consumers from returning and recommending the brand.
Strategy to mitigate returns
Extended return policies encourage spending by providing consumers with flexibility and reassurance; however, to effectively navigate this post-peak consumer activity, a robust returns policy needs to be in place with clear and concise instructions for the consumer to enable a smooth and fast return along with a strong operational relationship with a reliable 3PL partner that can help support the returns operations and mitigate the influx of returns and processing required, whilst keeping all parties experience a positive one.
Role of Third-Party Logistics (3PLs) in Return Management
Unipart Logistics provides reverse logistics in the consumer, automotive and retail sectors, processing returns quickly, easily, and efficiently. When arriving back at the warehouse, we process returns into sellable inventory and assist with exceptional customer service, providing updates at each point. We offer transparent monitoring systems for visibility over the reverse supply chain and effective inventory management systems to quickly and accurately put sellable returns back into stock.
Unipart Logistics utilises advanced technologies to ensure accuracy and quality regarding diagnostics, repairs and product tracking. Unipart purpose-built strategies and supplier partnerships are crafted to tackle the intricacies linked with returned items, building solutions that are right for our Customers’ unique product profiles.
Can we help you with your Returns and Supply Chain Operations? Discover how Unipart’s expertise can assist by contacting Emma Voss – emma.voss@unipart.com and Alistair Plant – alistair.plant@unipart.com or visit our e-commerce webpage.
1 https://www.parcelperform.com/insights/peak-season-returns-experience