Online returns may be big part of holidays, report says

By Lynda Cohen
New Jersey | Dec 19, 2017 at 11:20 am

Online returns could be worth as much as $32 billion this year, according to a CBRE report.

E-commerce returns are consistently higher than those made to brick-and-mortar retail, which puts the focus on how retailers limit and handle these returns.

Those well-positioned to thrive in the online return space — or reverse logistics — include third-party logistics firms and owners of 3PL facilities, according to CBRE.

Many retailers opt to contain costs and preserve their retail focus by outsourcing reverse-logistics functions to 3PL firms that specialize in that field.

“The process of managing returns — whether handled in-house or by third-party logistics firms — has become an important part of the e-commerce business, and a strong reverse logistics setup can have a significant impact on e-retailers’ profitability,” said Mindy Lissner, executive vice president at CBRE. “The abundance of returns from online purchases is another tailwind bolstering the industrial sector in the Turnpike corridor and other submarkets impacted by the growth of e-retail. As consumers increasingly gravitate toward buying goods online, we can expect New Jersey industrial to move forward in lockstep, benefiting from both the purchases and returns of online shoppers.”

Historically, returns of store-bought merchandise have amounted to 8 percent of total retail sales, where online returns range from 15 percent to 30 percent, depending on the product category.

If those percentages hold, the value of returns this season will increase by the same 13.8 percent that Adobe Analytics predicts for the increase in online sales this season, CBRE said.

Adobe foresees online sales this season reaching $107.4 billion, up from about $93 billion last year. By extension, CBRE calculates that the projected ceiling for returns is $32 billion, up from about $28 billion last year.

Lynda Cohen | lcohen@roi-nj.com | LyndaCohen