The last couple of months retail news has been bombarded with holiday sales predictions, popular upcoming trends, consumer shopping habits, and how retailers can prep their inventory for a period that can account for 30% of their annual revenue. And now that we’re in the holiday seasons, these predictions are turning into reality.
Holiday Stats So Far - Black Friday 2018
- This year's sales far exceeded the NRF's prediction that 164 million consumers would shop during the Thanksgiving to Cyber Monday sales period, with over 174 million American shoppers indulging.
- Of the 174 million Americans who shopped between Thanksgiving and Cyber Monday, each person spent an average of $335 over five days.
- Millennials aged 24-35 came out on top as the biggest spenders (Washington Post).
As important as these numbers and forecasts are to retailers, the post-holiday season is just as crucial, being the period over which a lot of returns come in.
According to an Optoro report, American consumers return more than $260 billion in goods each year. And about a quarter of those returns occur during the holiday season. Chain Store Age discussed that “around 10% — or close to $70 billion worth of merchandise — once purchased/gifted/unwrapped, will be heading back to U.S. retailers and manufacturers this holiday season”. So retailers - are you ready for returns?
In today’s world, retailers have been implementing new innovations to make their businesses faster, easier, and more convenient for their consumers. The checkout and returns processes have both been optimized. While checkout has been streamlined to provide shoppers with a simpler and more efficient means of completing their purchase, potential friction points around returning items have also been ironed out. Services like free returns, same-day shipping and quick in-store returns mean that returning items is simpler than ever before.
Whether it’s a pair of shoes that just don’t fit, or the weird sweater that you got from your aunt, returns during the holidays are inevitable. So, while it would be a dream come true for retailers to sell all of their merchandise, it’s imperative they have a solid strategy in place to deal with and make the most of items coming back to the store or warehouse.
Here’s how retailers can monetize returns this holiday season:
Structured Return Policies
Buying someone a gift is always risky, and not being able to easily return that gift makes a purchase even riskier. To get around this, establish a structured return policy and publicize this as much as possible across your site and in-store marketing. This helps to boost sales by assuring customers that they can easily return items if necessary. Consumers crave simplicity, so ensure that you stress how easy it is to return items with you should the item not be suitable.
Detailed Consumer Data
Learn what your consumer preferences are. Do they like to shop online? In-store? Are they purchasing popular trends? The more you know about your consumers, the better your inventory management will be. Having this type of information allows retailers to provide more accurate predictions of what consumers will be purchasing and where they’ll be buying. Of course, the reality is that consumers tend to be unpredictable; however with increased visibility comes more accurate demand forecasting and less excess inventory after returns are made.
Make Some Room
Get ahead of the game by shifting the inventory that will likely not be sold during the holiday season (loss leaders). Selling these items to off-price retailers will help to alleviate your excess stock, helping to make some room before returns start flowing in. This will help to create more physical room in warehouses and enable better cash flow.
Updated Backend Systems
Having up-to-date, robust backend systems in place to support the movement of the inventory and any pricing difficulties will allow retailers to fully maximize on the holiday season. Plus, having real-time visibility into your inventory will allow for quicker movement, and better insight into which products are being returned and why.
Returns will always be inevitable, but it’s how retailers handle these returns that can make or break their season. Ensure that you’ve planned how best to deal with these returns so you can focus on how to turn these over and have a successful start to 2019! Happy Holidays!