The landscape of retail returns is experiencing a seismic shift, with forecasts indicating UK returns will surpass £27 billion this year. ZigZag Global’s data reveals that more than 20% of online non-food purchases and approximately 50% of clothing items are being returned, creating substantial operational challenges for retailers.
Major high street names, including Next and John Lewis, have adapted their strategies by keeping physical stores closed during traditional Boxing Day sales, acknowledging the dominance of online shopping. This shift has catalysed the emergence of innovative solutions in the reverse logistics sector.
The returns process, traditionally viewed as a cost centre, is evolving into a profitable venture through sustainable initiatives. Companies like ACS (Advanced Clothing Solutions) in Scotland have successfully pivoted from traditional business models to capitalise on the returns market. Their partnership with tech company Archive demonstrates how artificial intelligence can streamline the sorting process for secondhand clothing, creating efficient resale channels for major brands.
American company (Re)vive has emerged as a particularly successful example, generating over $3 million in profit this year through their innovative approach to garment repair and resale. Their three-week turnaround model for returning items to full retail value represents a significant advancement in sustainable returns management.
The financial implications of returns management are substantial. Research indicates that slow and serial returners constitute nearly half of UK returns, while 69% of Generation Z consumers engage in ‘bracketing’ – ordering multiple sizes and colours of the same item. This behaviour pattern has prompted retailers to implement return charges to offset mounting operational costs.
Environmental considerations are becoming increasingly central to returns management strategies. Dr Talia Hussain from Loughborough University London emphasises the environmental impact of returns, including increased vehicle emissions and packaging waste. These concerns are driving retailers to develop more sustainable solutions, with many now focusing on returnless refunds and localised processing centres to minimise environmental impact.
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