The Reality of Holiday Returns: Burden or Blessing?
While consumers look forward to the new decade, they also have big plans: returning their holiday gifts. According to Oracle Retail’s holiday research, the majority of global consumers (77 percent) plan to return a portion of their gifts, with nearly 20 percent expecting to return more than half of their presents. Beyond a hefty return forecast, our research shows retailers should have convenience, choice and flawless execution on their “nice” list.
In-Store Shopping Holds Favor
Of the 15,800 worldwide consumers surveyed, 75 percent said they’ll shop in-store and bring purchases home compared to 55 percent who prefer to shop online and ship to their home. Although shipping provides some level of convenience, in-store is still the preferred channel to ensure high-demand gifts make it under the tree — and is equally seen as a convenient way to shop by most consumers.
Beyond the traditional route of baring the brutal elements waiting in line for one of three Hatchimals to be delivered to the local big-box store, 30 percent of millennials and 25 percent of Gen Z consumers will go the buy online, pick up in-store (BOPIS) route. They’ll be joined by just 14 percent of baby boomers. The growth of BOPIS not only feeds into consumers’ insatiable appetite for instant gratification, it gives retailers a significant opportunity to increase sales.
Shipping Preferences Are Becoming More Complex
While analyzing holiday shopping behaviors, one can’t ignore the fact that consumers want choice, especially when it comes to order fulfillment, which ratchets up complexity quickly. Generation X led in shopping online and shipping to home at 57 percent, with baby boomers not far behind at 56 percent, and similarly millennials at 53 percent and Generation Z at 46 percent. However, millennials are sending 33 percent of purchases to locations other than their homes. Our research found that 18 percent of millennials are shipping orders to their work, while 15 percent are using locker pickup. Baby boomers were by far the least likely to use an alternate location for online purchases at 13 percent. Key takeaway: Consumers want choice, and choice creates complexity, whether it’s on the buy or fulfill side of the consumer journey.
Dec. 26 Forecast: Flurry of Returns
The only thing growing as fast as BOPIS is possibly returns. During peak trading, returns are in and of themselves a holiday tradition. As trading out gifts becomes a staple of the holiday season, it’s important for retailers to capitalize on the opportunity by designing processes that capture intelligence during the interaction, and effectively turn this potential negative into new opportunity.
Across age groups, most consumers plan to return a portion of their gifts, with Generation Z expecting to return the most this year. Returns aren’t just a matter of when, but how. Two-thirds (65 percent) of consumers stated that they intend to return their gifts in-store. Retailers that have the right technology in place can not only proactively forecast returns and have the right procedures and policies in place to handle incongruent inventory, but also to gather customer insights that can inform future product design and merchandising strategies.
When handling returns, the point of service and customer engagement management system is essential to identifying the next best offer — in real time — to recover the sale or upsell at the point of interaction. As retailers move from the simple best practice of returns management to capitalizing on the opportunity, it’s imperative that associates have an accurate, real-time view of item, inventory, order and customer. This is crucial to preserving margins, retaining customer relationships and strengthening the customer experience.
A Jolly Outlook
Global consumers have more shopping options now than ever before, greater expectations for convenience and choice, and little tolerance for anything less than flawless execution. From meeting consumers’ evolving shipping preferences to turning returns into new opportunities, a technology strategy that puts the customer at the core of every business process and decision is key for retailers this season and beyond. Here’s to a healthy 2019 and turning the burden of holiday returns into a blessing in disguise come 2020.
Amber Trendell is global marketing director at Oracle Retail, an integrated suite of cloud services that combines reliability, security, cost savings, seamless interoperability, and embedded machine learning and AI.
Amber Trendell is Global Marketing Director at Oracle Retail, an integrated suite of Cloud services that combines reliability, security, cost savings, seamless interoperability, and embedded machine learning and AI.
Oracle Retail marketing is a dedicated team of professionals focused on driving growth, cultivating best practices, and building relationships across the retail ecosystem. Amber leads the global campaigns team which is responsible for content and digital strategy, demand generation and analytics.