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It is a week until Black Friday…so what should retailers expect as peak season really starts to kick off?
In truth, for many retailers, peak has begun. Sales may not have reached the heights anticipated for Black Friday weekend and beyond just yet, but they are already climbing. In recent years, retailers across the UK have adopted the method of starting promotions as early as October, or even September, to help smooth the sales spikes seen in late November and December ahead of Christmas. Amazon has, as usual, kicked off “Black Friday Week” today.
Our 2021 Peak Study showed that 83% of shoppers under the age of 45, planned to finish their Christmas shopping by 1st December. 34% of shoppers have at least started Christmas shopping before November even begins. However, what consumers tell us they will do on a survey, and what they actually do in reality, can be very different, particularly when it comes to optimistic Christmas shopping planning. Our statistics certainly back up that peak sales, and most certainly peak returns, are still to come.
Peak return volumes are typically around 70% to 100% higher than the rest of the year
Retailers gearing up for the usual busy end to the year can expect to see return volumes surge. In the six weeks following Black Friday weekend, many retailers will experience return volumes that are 70-100% higher than the same period in, for example, March. A price to pay for enjoying a bump in sales. Nevertheless the returns issue is very manageable with proper planning, a reliable carrier network, hardworking employees, and of course, an award-winning returns solution such as ZigZag.
Black Friday last year saw return volumes shoot up by 14% on its 2021 counterpart across the globe, with entire weekend up 17%. The UK was slightly below the average at 8%, but still a significant rise on returns. The UK is quite a mature market in respect to its adoption of Black Friday sales, so it is likely the larger jump globally is due to more retailers from each market joining in on the discount shopping frenzy.
Whilst the item per order dropped marginally from 2021 to 2022, the return value increased by 19%. Given the UK inflation rate, it is not particularly surprising that people are getting less “bang for their buck” than they did in 2021. This was the case for all major markets including US, Netherlands, Germany, and France.
This year, we can expect more of the same. The current cost-of-living crisis is forcing consumers to make more considered purchases that inevitably result in higher returns rates. We are unlikely to see a jump as large as the volume increases recorded in the pre-pandemic years of 2020 and 2021 due to consumer confidence and spending power constraints. However, it is extremely likely that Black Friday Weekend returns will once again rise from last year’s new heights, climbing by 5 to 10%.
In fact, our recent research found that 35% of shoppers say they are more likely to make a return due to the cost-of-living crisis.
Traditionally, the Tuesday after Cyber Monday is one of the few weeks of the year where more returns are sent back than the previous Monday. However, 2022 saw Cyber Monday in the UK record the highest level of returns of the festive period, people evidently juggling returning one item whilst purchasing the next.
Whilst Cyber Monday was the biggest day to return the week following Black Friday, retailers can’t relax just yet. The peak days for returns in 2023 are expected to be Monday 4th December and Tuesday 5th December. According to ZigZag’s 2022 study into consumer returns, 95% of people return within seven days. Given Black Friday Weekend is one of, if not the, biggest shopping periods of the year and Mondays are the clear favourite for consumers to make a return in the UK, a week following Cyber Monday is the safe bet for a wave of returns. The data supports this with the Monday and Tuesday a week after Cyber Monday boasting return volumes 5-8% higher, beaten only by the first week of January across the whole year.
US retailers can expect a very similar flurry of returns a week after Black Friday Weekend, almost identical to the UK. French consumers are more motivated to get their returns back, with a jump across the whole week immediately following Cyber Monday; Wednesday 29th November is likely to be the standout peak day.
Also, for many retailers, the decision this peak season will be whether to start charging for returns or not. In 2021, 92% of returns were free over the month of November. In 2022, only 32.5% of returns were free throughout this same period. This is a huge swing in the UK market and we expect many more retailers to start charging for returns this peak season as they look to recoup the substantial cost of returns.
For retailers in France, the US, and Germany, you can also expect more of retailers to move to paid returns but not to the extent of the UK market. In 2022, the three countries all had small movements towards paid returns but were still largely offering free returns (63-76% of companies offered free returns).
ZigZag Founder & CEO Al Gerrie commented: “The increase in paid returns is a healthy sign for retailers looking to recoup profit on the returns journey, because as the retail industry knows all too well: there is no such thing as a ‘free return’.”
Most consumers will look to take their returns to a Post Office or a particular carrier services’ drop-off location. They are typically the most preferred options across the UK and Germany. However, choice is key. Around half of consumers expect to see multiple options on the returns policy page, so retailers can’t rely solely on these options. Also, with peak return volumes at a high, retailers need to minimise the risk of delays and disruption by having multiple carrier partners they can rely on.
Last year saw collection from home requests up 87% across Black Friday and the week following. It is a service that is consistently increasing in adoption as consumers work from home more. Consumers are realising its convenience, even at a premium, with 48% of consumers demanding a collection from home option. Returning to lockers is also becoming increasingly popular with consumers using them 207% more across 2022’s Black Friday week than in 2021.
Retail brands that have brick-and-mortar stores could also explore promoting a Return to Store option. ZigZag client New Look had tremendous success offering a free Return to Store option to its customers this year. Shoppers flocked to their stores to drop off their parcels at hassle-free un-manned kiosks, freeing up New Look’s staff from handling returns whilst driving footfall to stores where they might be tempted to shop again.
New Look's Rachel Troke stated, “At over 400 stores, we are quite accessible for most of our customers across the UK. So, it came as no surprise that our returns have doubled in store since charging for online returns.”
It will come as no surprise that London was the capital of returned goods. With the city returning over eight times as much as second place Glasgow. However interestingly, when looking at returns per capita, Manchester and Nottingham came out on top. A citizen of either region is around two and a half times more likely to have made a Black Friday return than a Londoner. The biggest jump saw residents of Sheffield return 24% more than 2021's Black Friday, whereas Liverpudlians returned 9% less.
We recommend taking note of your return hotspots to see if they are out of kilter with the volumes sold into those regions. You may have a poorly performing carrier service or warehouse supplying that region.
Sizing issues remain the most prevalent reason for returning at 44% across both 2021 and 2022’s Black Friday weekend. In a possible attempt to solve sizing issues, 46% of consumers admitted to purchasing multiple items with the intention of returning at least one item (otherwise known as ‘bracketing’) in 2023. This is up from 33% in 2021.
Retailers can look to integrate Live Exchanges as a way of reducing returns and saving the sale. Live Exchanges can help consumers quickly and seamlessly get the next size up or down, reducing the need to ‘bracket’ their orders in the first place and giving them a second chance to get the right item. As much as 77% of the revenue lost during the returns process is due to sizing issues. Fortunately for retailers, 83% of shoppers want an easy option to exchange their return online.
The items that were sent back to the retailer the most in 2022 were mainly party items such as formal dresses and even ‘disco jeans’. This could in part be down to wardrobing – the act of purchasing items for an event, wearing them, and then returning the items for a full refund. This practice of returns fraud spikes over peak season as office parties, Christmas outings, and New Years celebrations arrive.
Ultimately, retailers should expect and plan for a jump in return volumes. Black Friday is always tough to predict but it is likely that returns will continue on their upward trajectory. Retailers should anticipate more of their competitors to move to paid returns as the industry looks to recoup the costs from returns-hungry shoppers and rising supply chain costs. Finally, retail brands should be wary that consumers return in a number of different ways, so it is vital to have a plethora of return options to ensure they minimise frustration and satisfy customers.
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