Physical Stores Welcome 90% Of Online Returns

It’s that time of year again – now that all the holiday gifts are opened, the returns start rolling in.

According to the Wall Street Journal, shoppers are increasingly flocking to brick and mortar retail locations to return the unwanted holiday gifts received online. This gives them an opportunity that eCommerce players miss: the chance for another sale.

With the surge of eCommerce shopping that now takes place during the holiday season, the post-Christmas rush is now fueled by an even bigger surge in returns of those items purchased online.

Research from the National Retail Federation revealed that 10 percent of all holiday purchases are returned, a percentage that often triples when it comes to purchases made online. They estimate holiday sales, excluding autos, gasoline and restaurants, will total $655.8 billion in November and December, which means that retailers can conservatively expect nearly $66 billion in goods to be returned.

The good news for brick and mortar retailers?

The majority of those returns are coming back to them rather than their eCommerce counterparts. In fact, consumers opt to return in-store at an extremely high rate – at J.C. Penney, the WSJ reported, more than 90 percent of online returns are done in physical retail locations.

That’s a significant opportunity for a retailer’s physical footprint to upsell, upsell, upsell – by clearing unsold inventory and capitalizing on sales using the gift cards that no doubt were found under many a consumer’s Christmas tree.  And, in anticipation of those returns, many stores are stocking their shelves with Spring merchandise to take advantage of the consumers’ propensity to spend money and the few occasions these days that they take their feet into the physical store.

Traffic at shopping malls and retail centers was markedly thinner this holiday season, especially since many retailers offered discounts much earlier in the season — starting in November — or made similar in-store deals available online as well. It’s been reported that roughly 109 million people shopped online during Thanksgiving weekend, compared to the 99 million consumers that shopped in stores.

Now may be the time that retailers are able to gain back some footing before ringing in the new year. But are retailers prepared for the wave of customers and goods heading their way?

Craig Johnson, president of consulting firm Customer Growth Partners, told WSJ that he expects the week after Christmas to account for nearly 14 percent of this year’s holiday sales.

“January had typically been a slow month in retailing,” David Bassuk, a managing director at AlixPartners, told WSJ. “With the heightened level of returns, retailers are planning for sales they never could before.”

In order to accommodate, merchants are increasing staff on their sales floors as January quickly approaches and delivering on coupons and other incentives to keep shoppers in the store.