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Retail Returns Rising, But It’s Not All Bad – WWD

Retail profits of merchandise purchased in 2021 will total $761 billion – and that’s a good chunk of last year’s total revenue growth in the US

But the number isn’t really surprising given that US sales have skyrocketed to more than $4.58 trillion due to steady increase in store visits for most of the year and steady online sales. steady. The Omicron variant saw a drop in store traffic in December.

$761 billion of goods are expected to be returned by consumers, according to the results of a survey by the National Retail Federation and Appriss Retail of 57 retailers conducted between October 13 and October 3. November 15, 2021. Appriss Retail, a division of Appriss Inc., provides artificial intelligence-based solutions to help retailers protect profits, unlock sales, and cut shrinkage.

Follow NRF and Appriss, the profit figure represented 16.6% of total US retail sales last year. This is up from 10.6% in 2020 (when retail sales were just over $4 trillion) but online returns are in line with recent years at an average of 20.8%. NRFThis figure does not include auto dealers, gas stations and restaurants.

Mark Mathews, NRF Vice President of Research Development and Industry Analytics, said: “As total retail sales continue to increase due to sustained consumer demand during the pandemic, it is not surprising that rates have increased. Overall profits are also affected. “While retailers have indicated that they are seeing an increase in in-store and online returns, the upside is that it also provides them with additional opportunities to further connect with customers. customers and provide a positive experience.”

According to NRF, online sales accounted for $1.050 trillion of total US retail sales last year. About $218 billion of online purchases were returned, with $23.2 billion (10.6 percent) being considered fraudulent.

According to the survey, for every $1 billion in sales, the average retailer earns $166 million in merchandise profits.

It also found that for every $100 of returned merchandise accepted, retailers lose $10.30 to fraudulent returns. Categories with the highest return rates are similar to the 2020 indexes: auto parts, 19.4 percent; clothing, 12.2 percent, and home improvement and home appliances at 11.5 percent.

The most common forms of payment used in the initial purchase leading to a return were credit card, 22.78%; cash, 12.69 percent and debit card, 7.04 percent.

Steven Prebble, chief executive officer of Appriss Retail, said: “Retailers must rethink profitability as an important part of their business strategy. “Retail is dealing with a large volume of returned items. Now is the time to stop thinking of profits as a business expense and start seeing them as a time to really engage with your consumers. “

Earlier this month, NRF reported that retail sales during the November-December holiday season totaled $887 billion. On average, retailers expect 17.8%, or $158 billion, of merchandise sold during the holiday timeframe to be returned.

https://wwd.com/business-news/retail/retail-returns-nrf-1235053088/ Retail Returns Rising, But It’s Not All Bad – WWD

Linh

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