Say hello, and wave goodbye: retail’s returns issue…

We've all been there; we've all done it. Post-holiday returns have become part and parcel of the omnichannel shopping experience over the last five years and the 2024 holiday season seems to have been no different. 77% of consumers admitted to returning Christmas presents, meaning an estimated 67 million presents, to a value of £1.5 billion^[1] are expected to be returned over the post-holiday period.

From wrapping to returns, unwanted gifts start with good intentions but invariably miss the mark. From ill-fitting clothing to duplicate gadgets, the nature of ‘blended’ omnichannel retail means returning of an unwanted item initiates an (often) complex reverse logistics process, putting immense pressure on retailers, from both a logistical and financial perspective.

The journey of the unwanted gift is not a simple one. Yes, brands must manage the deluge of returns efficiently and effectively to maintain profitability, but there is a softer (albeit equally important) side to returns than simply pounds, euros and dollar signs – customer satisfaction.

The returns process is a common source of frustration for consumers, with 39% citing long refund waits and 33% pointing to unclear policies as major pain points. These issues have real consequences, with 40% of consumers saying they would actively avoid a retailer after a difficult returns process, highlighting the practical importance of a seamless and user-friendly return experience in actively building consumer trust and fostering long-term brand relationships.

But the returns issue is not simply a one-dimensional, singular challenge. There is a generational element that need to be taken into account that is especially pronounced among Gen Z shoppers. This group returned gifts at a much higher rate (65%) last year than their older counterparts (19% among those aged 65+) and given Gen Z’s focus on sustainability, ethics and brand identity retailers face additional pressure to not only streamline their returns process, but also minimise the environmental impact of the practice too.

There’s more to returns than smart software and pound signs however, and retailers also need to consider the emotional, empathetic aspect of returning items too. Customers often feel awkward or even a little disappointed when returning gifts, so a smooth, well thought-out and communicated process can actually turn a (potentially) negative interaction into something that actually creates a positive brand experience and fosters long-term loyalty.

Manhattan’s Returns Management capabilities streamline and optimize the returns process, delivering a frictionless interaction for both consumers and retailers, with the latest returns features strengthening customer loyalty by creating a seamless experience, promoting an increase in store traffic and cross-selling opportunities.

With Manhattan’s new capabilities, consumers can choose their most convenient way to return – whether in-store or online, which also includes printer-less options and refunds or exchanges are processed as soon as carriers scan the package ­­– 3-5 days faster than most traditional retailers.

For shoppers today, experience beats products and at Manhattan, we are committed to solving the business challenges faced by modern retailers in the simplest and most efficient way possible. Find out more about how we could help you navigate the challenges on seasonal returns here.