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File Image: IOL

Retailers brace for ‘returnageddon’ with 30% of purchases expected to be returned globally

By Opinion Time of article published Jan 20, 2021

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Data released by global CRM company Salesforce, shows a 50% increase in digital spend when compared to the 2019 shopping season, making 2020 one of the biggest digital holiday shopping seasons to date. Consumers spent $1.1 trillion online worldwide, compared to $723 billion worldwide in 2019.

Salesforce combined insights from over one billion global shoppers across more than 40 countries powered by Commerce Cloud between November 1 and December 31, 2020. This season’s top highlights and trends include:

Digital commerce surged later in the year, despite an earlier start to the holiday season: Although retailers kicked off holiday discounts and promotions earlier in October, the bulk of this year’s digital sales were still generated during traditional shopping holidays. Total Cyber Week digital sales reached $270 billion globally, while the first two weeks of December accounted for $181 billion in global sales.

Retailers offering curbside and other pickup options grew almost twice as fast as those that didn’t: With strained shipping systems and consumers prioritising safety, retailers with curbside, drive-through and in-store pickup options outperformed those without these services. US retailers which offered these options increased digital revenue by 49% on average year-on-year, while retailers which didn't only saw 28% average growth year-on-year. Retailers offering curbside, drive-through and in-store pickup options also experienced 54% digital revenue growth year-on-year in the five days leading up to Christmas, compared to 34% growth of those who didn’t.

Consumers embraced financing options: With consumers looking to pay for big ticket holiday gifts in installments, buy-now-pay-later usage saw a year-on-year increase of 109%, with the biggest increase taking place the week before Christmas.

Sporting Goods and Home Goods were the hottest product categories: Revenue for Sporting Goods grew 108% compared to the previous year, Home Goods grew 89% and Food and Beverage kept pace with 80% growth. Active Apparel (35%), Footwear (39%) and General Apparel (40%) experienced the least growth in revenue this holiday season.

Retailers brace for “returnageddon”: Over $330 billion in online purchases are expected to be returned globally—about 30% of all purchases made—as a result of this holiday’s ecommerce spike.

"The 2020 holiday season was defined by the pandemic and forced retailers and brands to innovate quickly with the introduction of services like curbside pickup, virtual concierges and a focus on social messaging and live streaming to reach shoppers in new ways,” said Rob Garf, VP, Industry Strategy for Retail, Salesforce. “We expect to see these new innovations remain in 2021 with holiday strategies becoming the new standard that consumers expect from their favourite retailers and brands.”

To help retailers and brands benchmark holiday performance, Salesforce combined data and holiday insights on the activity of over one billion global shoppers across more than 40 countries powered by Commerce Cloud. This included billions of consumer engagements and millions of public social media conversations through Marketing Cloud, and customer service data powered by Service Cloud. Several factors are subsequently applied to extrapolate projections and actuals for the broader retail industry.

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