Watch out for holiday shopping season returns! The return cost of this category is 15 times higher

2022-11-21
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Author:Blue Ocean Yiguan
Source: egainnews

Sailing to watch out for holiday shopping season returns! The return cost of this category is 15 times higher

According to the analysis of the National Retail Federation (NRF), from November to December this year, the sales of e-commerce in the United States will exceed 222 billion dollars, up 13% year on year (the data in this paper are all for the American market).

However, be alert, the number of return orders in the holiday shopping season will also increase significantly, leading to an increase in the return rate.

According to the report jointly issued by commercial real estate company CBRE and return technology company Optoro (hereinafter referred to as "CBRE Optoro Report"), it is estimated that the amount of returns from November to December will be 66.7 billion US dollars, a year-on-year increase of 13%, but an increase of nearly 46% compared with the average of the past five years.

That's 66.7 billion dollarsReturn amount, accounting for about 30% of the total e-commerce sales of $222 billion

Lanhaiyiguan has learned that the return amount of physical stores accounts for about 10% of the total sales. It can be seen that the return rate of e-commerce sales is much higher than that of physical stores.

In addition, CBRE Optoro reports that two-thirds of consumers will return at least one item during the holiday shopping season.

The cost of returning goods during the holiday has risen, and electronic products are 15 times higher than clothing

The high flow and sales volume in the holiday shopping season also increase the number of return orders and the return rate is likely to increase.

It should be noted that the cost of holiday returns has also increased. "Free returns" are for consumers, but not for e-commerce sellers.

according toCBRE-OptororeportLast year, the average return cost was 59% of the price of goods, but this year it has become 66%,Overall, it increased by 7%.

In other words, if labor costs, transportation and warehousing costs are considered,On average, the return cost of a product during holidays accounts for two-thirds of the sales price of the product

Blue Ocean Yiguan has learned that,High value computers such as laptops, tablets and mobile phoneselectronic product, the return freight is the highestIn addition, considering factors such as commodity size, testing, renovation and e-commerce platform costs,The overall cost of electronic products is 15 times higher than that of other products.

Why does the return cost increase?

For electronic products, it is mainly because the staff must remove the personal data on the products.

The founder and CEO of Optoro said that because there are many things connected to the Internet of Things that need to be cleared, security issues need to be considered. For example, all watches now have sensors, and there are also clothes and shoes with sensors. In the future, there will only be more and more products that need to clear data, which will require costs.

A series of factors have led to the increase of return costs, such as global logistics congestion, transportation, processing, etc.

On the one hand, the reason why there are more return orders in the holiday season is that large retailers are facing the problem of increased logistics costs, such asWal-Mart, Target, Best BuyIn order to obtain sales, they have to increase logistics cost investment and create a better logistics system.

CBRE estimates,The logistics costs of these large retailers are now 12% of salesFor more traditional retailers, the logistics cost is only 6%.

The senior personage of the logistics industry in the United States said that the "early start of holiday shopping" caused by the supply chain problems also made the return flow earlier.

In addition, during the epidemic,The salary of logistics staff has been increased by 5%, and,Retailers or sellers need to prepare 20% more warehouse space to handle returned goods.

In an industry that is itself facing profit challenges, the profits of sellers are further compressed due to the rising logistics costs.

CBRE Optoro said that "return" continues to be a concern for environmental protection, because return logistics requires more packaging and transportation. It is estimated that after this holiday shopping season, 5.8 billion tons of return packaging will be sent to the landfill.

At the same time, the return logistics will generate 16 million tons of carbon dioxide emissions.

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