Whether it’s a misjudged gift, an incorrect size, or an impulse purchase, post-Christmas returns have become a hallmark of the retail calendar. Every year, ‘National Returns Day,’ the first working day of the year, consistently sees a surge in activity. This contributes, in part, to an estimated total of £27bn in returns that retailers must process annually.
For online retailers, handling these returns isn’t just a logistical challenge, it’s a critical opportunity to win customer loyalty and streamline operations, writes Matt Gregory, managing director Northern Europe at Körber Supply Chain Software.
With ecommerce driving habits like buying multiple sizes or styles and returning the excess, return flexibility is now a non-negotiable expectation. Take it away, and customers may simply shop elsewhere.
Today’s shoppers prioritise convenience and a seamless experience. Returns, while costly, are now part of the “cost of doing business” in the digital-first retail landscape. Clunky returns processes—like limiting customer service options or requiring customers to pay for returns, as some retailers are now implementing, can alienate consumers. Instead, retailers must embrace returns as an integral part of their strategy. This means offering simplicity and speed, all while minimising operational costs.
UK retailers manage the delivery process well, but returns remain a problem area. Many retailers lack optimised returns processes, leading to inefficiencies, waste, and unhappy customers. Returns can often pile up in warehouse corners or worse—end up in landfill. Retailers must treat returns with the same care as deliveries to truly streamline their operations.
Improving visibility of returns
One of the biggest hurdles in managing returns is a lack of visibility. Advanced Order Management Systems (OMS) and Warehouse Management Systems (WMS) with real-time data capabilities can be game changers. Imagine this: a customer returns an out-of-stock XL polo. With proper tracking, that polo could be intercepted mid-return at a distribution hub and redirected to fulfil another order, reducing restocking delays and lost sales.
This circular approach to inventory—where returned goods are quickly inspected, repackaged, and redeployed—aligns with both sustainability goals and customer expectations. It also reduces waste, improving the bottom line and enhancing brand reputation among eco-conscious shoppers.
Ultimately, agility is the linchpin of a successful returns process. Retailers must invest in real-time inventory tracking to monitor items throughout their journey- whether outbound, in transit, or just returned. Moving forward, AI-driven inventory forecasting can also help to predict demand and better manage stock levels.
These tools empower retailers to optimise their operations and deliver a seamless customer experience. They also pave the way for long-term sustainability—a key differentiator in today’s competitive market.
Do return charges help retailers?
Some retailers, including Asos, H&M and Zara, have tested the idea of charging for returns to offset costs and deter impulse purchases. While understandable, this approach risks alienating customers and damaging brand loyalty, especially in apparel. Customers are unlikely to tolerate return fees when competitors offer free and flexible options. While retailers are exploring solutions like virtual fitting rooms to help alleviate the need for customers to buy multiple sizes, the need for an optimized returns process is critical.
Returns aren’t just a cost issue, they’re a sustainability challenge. From excess packaging to wasted stock, poor returns management not only affects the bottom line, but also harms the planet. By implementing circular inventory practices and green logistics, retailers can mitigate the negative impact returns may have.
Incorporating ESG (Environmental, Social, and Governance) principles isn’t just good for the planet—it’s good for business. Retailers that champion green initiatives can bolster their reputation and attract eco-conscious consumers.
Post-holiday returns are inevitable, but they don’t have to be painful. By embracing visibility, investing in technology and prioritising sustainability, retailers can transform returns from a logistical headache into a competitive advantage. As we gear up for the next peak retail moment, the question isn’t whether returns will happen, it’s how well retailers handle them. With the right strategies in place, returns can drive loyalty, efficiency, and long-term success.
Matt Gregory, Managing Director Northern Europe at Körber Supply Chain Software
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Our editor carefully curates two newsletters a week filled with up-to-date news, analysis and research, click here to subscribe to the FREE newsletter sent straight to your inbox and why not follow us on LinkedIn to receive the latest updates on our research and analysis.
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GUEST COMMENT Optimising post-holiday returns for customer retention
Katie Searles
Whether it’s a misjudged gift, an incorrect size, or an impulse purchase, post-Christmas returns have become a hallmark of the retail calendar. Every year, ‘National Returns Day,’ the first working day of the year, consistently sees a surge in activity. This contributes, in part, to an estimated total of £27bn in returns that retailers must process annually.
For online retailers, handling these returns isn’t just a logistical challenge, it’s a critical opportunity to win customer loyalty and streamline operations, writes Matt Gregory, managing director Northern Europe at Körber Supply Chain Software.
With ecommerce driving habits like buying multiple sizes or styles and returning the excess, return flexibility is now a non-negotiable expectation. Take it away, and customers may simply shop elsewhere.
Today’s shoppers prioritise convenience and a seamless experience. Returns, while costly, are now part of the “cost of doing business” in the digital-first retail landscape. Clunky returns processes—like limiting customer service options or requiring customers to pay for returns, as some retailers are now implementing, can alienate consumers. Instead, retailers must embrace returns as an integral part of their strategy. This means offering simplicity and speed, all while minimising operational costs.
UK retailers manage the delivery process well, but returns remain a problem area. Many retailers lack optimised returns processes, leading to inefficiencies, waste, and unhappy customers. Returns can often pile up in warehouse corners or worse—end up in landfill. Retailers must treat returns with the same care as deliveries to truly streamline their operations.
Improving visibility of returns
One of the biggest hurdles in managing returns is a lack of visibility. Advanced Order Management Systems (OMS) and Warehouse Management Systems (WMS) with real-time data capabilities can be game changers. Imagine this: a customer returns an out-of-stock XL polo. With proper tracking, that polo could be intercepted mid-return at a distribution hub and redirected to fulfil another order, reducing restocking delays and lost sales.
This circular approach to inventory—where returned goods are quickly inspected, repackaged, and redeployed—aligns with both sustainability goals and customer expectations. It also reduces waste, improving the bottom line and enhancing brand reputation among eco-conscious shoppers.
Ultimately, agility is the linchpin of a successful returns process. Retailers must invest in real-time inventory tracking to monitor items throughout their journey- whether outbound, in transit, or just returned. Moving forward, AI-driven inventory forecasting can also help to predict demand and better manage stock levels.
These tools empower retailers to optimise their operations and deliver a seamless customer experience. They also pave the way for long-term sustainability—a key differentiator in today’s competitive market.
Do return charges help retailers?
Some retailers, including Asos, H&M and Zara, have tested the idea of charging for returns to offset costs and deter impulse purchases. While understandable, this approach risks alienating customers and damaging brand loyalty, especially in apparel. Customers are unlikely to tolerate return fees when competitors offer free and flexible options. While retailers are exploring solutions like virtual fitting rooms to help alleviate the need for customers to buy multiple sizes, the need for an optimized returns process is critical.
Returns aren’t just a cost issue, they’re a sustainability challenge. From excess packaging to wasted stock, poor returns management not only affects the bottom line, but also harms the planet. By implementing circular inventory practices and green logistics, retailers can mitigate the negative impact returns may have.
Incorporating ESG (Environmental, Social, and Governance) principles isn’t just good for the planet—it’s good for business. Retailers that champion green initiatives can bolster their reputation and attract eco-conscious consumers.
Post-holiday returns are inevitable, but they don’t have to be painful. By embracing visibility, investing in technology and prioritising sustainability, retailers can transform returns from a logistical headache into a competitive advantage. As we gear up for the next peak retail moment, the question isn’t whether returns will happen, it’s how well retailers handle them. With the right strategies in place, returns can drive loyalty, efficiency, and long-term success.
Matt Gregory, Managing Director Northern Europe at Körber Supply Chain Software
Stay informed
Our editor carefully curates two newsletters a week filled with up-to-date news, analysis and research, click here to subscribe to the FREE newsletter sent straight to your inbox and why not follow us on LinkedIn to receive the latest updates on our research and analysis.
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