Returns prove to be an expensive nuisance for online retailers
Especially after the Christmas period, many online retailers will probably have to take back goods. Most of them offer low-threshold procedures for this. A survey now shows how high the costs for returns can be for a retailer. One sector stands out in particular.
Despite great efforts to reduce the number of returns, online retailers are struggling with the high costs of returns. This is the result of a study by the retail research institute EHI, for which online retailers from Germany, Austria and Switzerland were surveyed. According to the study, the average cost is between five and ten euros for each returned item. Returns in the home and furnishings sector are particularly expensive at 10 to 20 euros due to their size and higher value. According to the respondents, the biggest cost driver is checking the returned items and checking their quality.
According to the study, the volume of returns varies greatly depending on the sector. Fashion products have particularly high rates of 26 to 50 percent on average. Online shoppers often order several variants in order to decide which item of clothing they like best when trying it on, write the authors of the study. This is part of the business model. Many of the returned fashion items then go back on sale.
On average across all product groups, the item-related returns rate is between six and ten percent and therefore at a similar level to previous years. 58% of retailers state that the rate is constant, with 21% reporting a slight increase and 15% a slight decrease. According to the study, the pandemic has not had a significant impact on the trend. Reasons for returns are recorded
Detailed item descriptions for prevention
74% of retailers are specifically trying to avoid returns. In order to be able to take the right countermeasures, 70 percent record the reasons for returns. For 86% of respondents, detailed information in the online store with precise descriptions and images is the most important measure to reduce the rate. Few sellers leave the shipping costs for returns to the customer. Only 14 percent of online retailers make use of this option to reduce the number of returns. Almost two thirds cover the shipping costs.
"It seems essential for them to offer this service due to the high level of competition and because they assume that customers expect such a service," write the authors. According to a survey by market research company GfK, Germans were not as keen to shop online this year as they were in 2022, spending 17% less money in nominal terms - i.e. not adjusted for price - than in the previous year. "After Germans were forced to buy many things online during the pandemic, they are now increasingly drawn to local stores again," says GfK retail expert Filip Vojtech.
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Despite the efforts to minimize returns, parcel service providers face significant costs in handling returned items from online retailers, such as Amazon and others involved in online trading. A recent study by GfK revealed that Germans spent 17% less money on online shopping this year compared to 2022, possibly influencing the volume of returns.
Source: www.ntv.de
