goTRG 2022 Holiday Report: Retailers’ Perspectives on Consumer Shopping & Returns
This year, gas prices and inflation spiked, leading consumers to halt discretionary spending1. Additionally, late-arriving goods missed their sales seasons. This combination of factors left retailers with millions of dollars of stagnant inventory. The challenges were (and still are) severe, as a recession looms and retailers struggle to offload excess stock. Yet, despite the bleak economic outlook, retailers expect consumer spending to pick back up for the holidays.
Our third annual holiday survey revealed that 55% of retailers expect consumers to spend more this year. This sentiment aligns with Deloitte’s annual holiday forecast predicting retail sales will increase between 4% and 6%2. While a modest rise compared to last year’s 15.1% growth, this holiday season will bring $1.45 to $1.47 trillion in revenue between November and January.
In particular, eCommerce sales will grow by up to 14.3%, presenting unique opportunities and challenges. Each year, eCommerce continues to represent a larger portion of total retail sales, however it is also the channel that receives the highest returns rates (20.8%)3. As a result, our survey found that 60% of retailers are making bold changes to their returns policies to help mitigate the high cost of processing their eCommerce returns.
As a pioneer of the returns industry, goTRG’s end-to-end returns management solutions help retailers navigate the ever changing consumer returns landscape fueled by inflation and online shopping growth. Our returns management SaaS, reverse supply chain, and reCommerce business verticals under one roof, give us the ability to ensure the maximum recovery and the fastest velocity for the entire returns lifecycle from in-store or online initiation through resale.
“As processing costs continue to rise and on-hand inventory continues to outpace sales going into the holiday season, the right returns management solution can offer the ability to transform some of this season’s retail losses into meaningful revenue opportunities.”
Sender Shamiss
Co-founder and CEO, goTRG
Key Insights
55%
of retailers expect holiday sales to rise, despite economic concerns
75%
of retailers are starting holiday sales even earlier this year
73%
of retailers rate returns as a moderate-to-severe problem for their business
60%
of retailers are changing returns policies as a result of rising costs and volumes
Participant Demographics
We surveyed 500 retail professionals across the US to clearly understand the industry’s outlook and strategies leading into the 2022–2023 holiday season.
Gender
Annual Sales
Annual Returns
Shopping Expectations and Strategies
55% of retailers think consumers will increase spending this holiday season
But just in case…
Retailers are taking every precaution to eliminate the inflation factor. For example, Amazon recently held their second Prime Day-like shopping event to offer deals even earlier this year. Retailers are following suit as they prepare for Black Friday and Cyber Monday shopping well before last year’s start date.
75%
of retailers are starting holiday sales even earlier this year
Retailers are staffing up and moving overstock to prepare for holiday sales
Additional Personnel
Despite a tight labor market and economic uncertainty, retailers are expecting demand to spike, and staffing teams to handle the surge.
77%
of retailers will hire the same or more seasonal workers this holiday season compared to previous years
23%
will hire fewer seasonal workers
Temporary Storage
Despite expensive storage fees4 and the diminishing value of aging inventory, most retailers are storing excess goods to clear the floor for seasonal holiday goods.
45%
of retailers say they will be storing their own overstock to make room for holiday inventory
36%
are trying to move back-stock inventory through clearance sales
15%
are offloading stock to third-party partners to resell on the secondary market
Takeaway
Once the holiday season ends, the 45% of retailers that stored their excess items will be faced with the daunting task of figuring out how to reposition that aged and likely less-valuable inventory. It will be critical for them to have a sound strategy in place to help them identify the most profitable sales channel for those goods.
Returns Expectations and Strategies
Most retailers are bracing for rising returns this year
65%
of retailers anticipate the same or higher returns rates this year
Returns rates will rise as sales volumes increase, particularly for eCommerce channels.
A spike in post-holiday returns could mean even more headache and hardship for retailers whose businesses are already significantly impacted by returns.
73%
rated returns as a moderate-to-severe issue for their business
Rising returns costs rank as top concern
A couple of years ago, retailers’ top priority was delivering a positive consumer experience. Today, rising returns rates and shipping fees have changed the overall sentiment and led to more aggressive returns policies and penalties.
Retailers’ Top 3 Returns Challenges
50%
Returns processing costs
34%
Delivering positive customer experiences
14%
How to determine the most profitable disposition route
Shaking up returns policies
In this post-Covid digital age, retailers must balance consumer expectations with the real costs of processing returns5. As a result, 60% of retailers are changing their policies, and free returns are no longer the standard.
Top 3 Returns Policy Changes
67%
are charging additional shipping or restocking fees
32%
are offering longer returns windows
24%
are offering returnless refunds
Takeaway
In contrast with previous years, retailers are changing their returns policies to be less customer centric, and more aligned with business priorities and cost reduction.
Methodology
The goTRG holiday retail survey includes data from third-party market research provider, Pollfish, external data, and goTRG’s Spring consumer survey report. Pollfish offers a broad distribution network, narrow targeting, and a quality check system to weed out fraud and garner industry-focused responses.
Sources
- 1. goTRG, 2022 Spring Survey: Consumer Shopping & Returns Behavior
- 2. RIS News, Holiday Retail Forecasts and Predictions for 2022
- 3. NRF, Retail Returns Increased to $761 Billion in 2021
- 4. Retail Dive, Retailers take expensive measures to clear inventory ahead of peak season
- 5. goTRG, Product Returns Processing: 5 Attributes to Identify Returns Worth Touching