Record-setting online holiday sales forecasts combined with new try-before-you-buy business models are expected to propel upwards of $550 billion in returns this year. To minimize the impact on the supply chain and boost overall profitability, companies need to assess their reverse logistics network for opportunities to increase capacity, improve inventory recirculation, and cultivate customer loyalty.
The retail industry is bracing for a season of uncertainty as Chinese tariffs intended to amend trade imbalances have had the adverse effect. GDP has already dropped, signaling an inevitable downturn on the horizon. Slow growth is now forecasted beyond 2020, and many retailers are already feeling the implications. So far this year, retailers in the U.S. and UK have shuttered 8,579 stores, with this number projected to reach 12,000 by year’s end.
For now, online retail sales seem to be immune to this downturn. In fact, this holiday season forecasts strong growth for e-commerce. The National Retail Federation projects online retail sales may exceed $167 billion in 2019, an increase of 14% from last year. This is substantial when you consider the retail industry as a whole is hoping for a mere 3.8% uptick.
However, these online sales have an added supply chain burden and subsequent cost of business: high return rates. Now more than ever, returns are becoming the norm for online shopping.
