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.”
Co-founder and CEO, goTRG
We surveyed 500 retail professionals across the US to clearly understand the industry’s outlook and strategies leading into the 2022–2023 holiday season.
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.
Despite a tight labor market and economic uncertainty, retailers are expecting demand to spike, and staffing teams to handle the surge.
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.
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 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.
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.
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.
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.
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.