Retailers Should Brace for a Tidal Wave of Returns

Here is the article. 

I am placing bets on EXPR stock, and I own 2300 shares with cost $1.19/ share. I like to figure out more about retail and how I should make some profit over holiday season. 

My notes

1. $115 billion of merchandise will be returned between Thanksgiving and the end of January, compared with an estimate of $100 billion last year.
2. Even before the pandemic, managing returns was a feat of logistical acrobatics, given that some items can be put back on shelves, some must be refurbished, and others go to landfills.
3. The size of items returned is up more than 200% since the pandemic began

Americans are in the final sprint of a record year of e-commerce spending, filling their digital carts with holiday gifts and decor in a year when public health concerns are keeping them away from stores. That online haul, though, foreshadows an unfortunate aftershock for retailers: A potentially unprecedented deluge of merchandise returns.

Online purchases have long had higher rates of returns than those for goods bought in stores, for obvious reasons: When you don’t try on or test a product before buying, you’re more likely to make a regrettable purchase.(1) With e-commerce spending expected to grow 35.8% in the U.S. this holiday season, the safe bet is that returns will surge, too. Optoro, a so-called reverse logistics company that helps retailers manage returns, estimates $115 billion of merchandise will be returned between Thanksgiving and the end of January, compared with an estimate of $100 billion last year.

This creates fresh challenges for stores whose supply chains and in-stock positions have been strained for the better part of a year by greater demand in their e-commerce channels. The ones that adapted to higher return volumes early in the pandemic and have worked to make the experience more seamless for shoppers are better positioned to weather the onslaught.

Even before the pandemic, managing returns was a feat of logistical acrobatics, given that some items can be put back on shelves, some must be refurbished, and others go to landfills. Now, though, the choreography has new twists. Consumers are returning bigger items such as furniture and appliances. Sender Shamiss, the chief executive officer of reverse logistics provider goTRG, said the size of items returned is up more than 200% since the pandemic began. That’s just one cause of a space crunch: Tobin Moore, CEO of Optoro, said his company has been working to help retailers find temporary space to house and process returns because they have had to reconfigure areas normally used for this purpose to fulfill outgoing online orders.