Holiday e-commerce is ramping up. In the five-day period between Thanksgiving and Cyber Monday, Adobe Analytics predicts American consumers will drop $37 billion online, representing 16% of our total online holiday spending.
But the thing about online shopping is that a lot of that stuff will be returned, especially with generous COVID-era policies like free return shipping and 60-day return windows.
Those policies are expensive for retailers. But rolling them back is risky.
Free and relatively frictionless returns encourage us to spend online without restraint, yet they eat away at corporate profits. Tony Sciarrotta with the Reverse Logistics Association said retailers feel sort of stuck.
“The genie is out of the bottle,” he said.
A handful of big e-commerce players are testing the waters with shorter windows or small fees for returns, he added. But they risk alienating customers who have lots of other options.
“I would say that we’re in a very experimental phase,” said Terry Esper, a professor of logistics at Ohio State University, “when it comes to how we are grappling with the expectations of returns versus the cost associated with managing those returns.”
He said some companies are trying to prevent costly returns by giving more detailed product information upfront.
“Even to the tune of virtual fitting rooms allowing customers to virtually try on things,” Esper said.
Others have started reserving cushy return policies for their loyalty program customers.
But this holiday shopping season is an especially risky time for retailers to be tinkering, said Sonia Lapinsky, a retail analyst with AlixPartners.
“Because we’re at a point where the consumer is pretty timid and we’re going into a holiday season with a lot of uncertainty,” she said.
She said consumers are pulling back, and some are seeking out favorable return policies as part of their holiday budgeting strategies.
