Complimentary White Paper

The Future and Challenges of Multi-Channel Retail

Even as e-commerce continues to grow and pandemic-influenced shopping habits are boosting online sales further, multi-channel operators remain ahead of the pack. This suggests that even in the face of “black swan” disruptions such as the COVID-19 pandemic, the future of retail will belong to “evolved” retailers: online retailers with a physical presence, and traditional retailers who successfully leverage multi-channel sales.

However, online sales are particularly vulnerable to returns, both because of the relatively simple return procedure and increased quality risks compared to physical shopping. Quality control at the source is one of the most effective ways to prevent the negative business impacts of product returns such as loss of revenue, supply chain disruption and reputational damage.

Product Returns: Quick Facts

• In 2019, product returns amounted to $1.07 trillion worldwide, and $309 billion in the US
• Between 15%-40% of products bought online are returned; for apparel, the figure is higher at 30-40%
• The average cost of product return is US$8 per product, or 30% of the purchase price
• 65% of the time, the responsibility for the online return lies with the merchant, not the consumer
• Over 40% of online returns are caused by products being defective, damaged on arrival, or not matching the description
• Another 23% of products are returned because the wrong product was shipped
• Returns are here to stay: 78% of consumers would buy more from retailers offering free returns, and 86% would give them repeat business…
• …but if a retailer does not offer free returns, it risks losing almost half of its potential buyers