With Christmas quickly approaching, footfall in shops rising and clicks online increasing, customers are rushing to grab the best Christmas presents and deals in the seasonal sales.
Customers in store and online are acting on highs of adrenaline as they find a not-to-miss item leading to quick, impulsive purchase decisions amidst the seasonal pressure of Christmas.
At this time of year, it is commonplace for these customers to feel regret after buying their much-desired items. Retailers are also under pressure to cope with these sudden changes in heart, often referred to as buyer’s remorse. With many regrettably bought items sent back to the retailer’s doors at this time of year it is important to implement effective returns processes to minimise the cost implications as much as possible.
But what is ‘buyer’s remorse’? In the returns game, we refer to this phenomenon when we see a spike in returns. Often a result of ever-more tempting deals and sales that usually crop up around Black Friday, Cyber Monday and pre-Christmas offers, this remorse can take several forms.
Firstly, overspending can hit shoppers when they get home and take stock of their purchases. Often budgets are overstretched, which results in goods being returned. Secondly, especially in the case of e-commerce, several of the same item, perhaps in different styles or sizes are purchased, with decisions to keep only one or two and return the rest.
This all has an effect when goods are marked for return, it impacts retailers’ bottom lines as the cost of returns, which is often paid for by the retailer, limits that single products profit margin. The use of an item on return is also limited as the duration in the returns process means the product has less opportunities to be sold particularly when a returned item is then considered as a second hand product.
Retailers will continue to see the impact of buyer’s remorse as buying options soar and prices plummet in the Christmas sales every year. Lax returns options for consumers are not helping retailers either as they give buyers the opportunity to buy and return with very little cost and effort to them at high cost to the retailer.
The increasingly popular try-before-you-buy trend, which allows customers to return masses of unwanted items without having to pay a penny, has steeped retailers in exceedingly high returns costs. With 85% of consumers expecting retailers to provide returns for free, this cost is only set to increase.
Meeting consumer demand by providing convenient returns policies may encourage more customers to buy and shop, however this inevitably encourages more rash decisions resulting in more buyer’s remorse and more returned items. To limit the cost implications of returned items retailers may need to re-consider their returns policies to find a balance between providing shopping convenience and making a profit. A recent study by Brightpearl has shown that if customers continue to return an average of just three items a month, the cost of returns for retailers will triple if they continue to take no action.
Data that we at B-Stock have observed has shown that retailers with the most relaxed returns policies and extended return terms suffer the most. With the busy Christmas season upon us and with the average person in the UK spending £748 per person on Christmas gifts there is great opportunity for retailers to sell but significant costs involved with the impact of buyer’s remorse.
To cope with the returns of unwanted goods, retailers should consider ways of maximising profits on returned products. The secondary market can give back control to retailers in selling their returned products. With B-Stock, retailers can access a diverse base of approved business buyers to find the best prices for the value of their products.
By Ben Whitaker of B-Stock, which offers the world’s leading auction platform for returned, excess, and other liquidation inventory