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Delving into data on the post-Christmas 'return season'

Richard Jones Archive

For almost all retailers, December is the busiest month of the year. The sales environment becomes extremely competitive, as foot traffic picks up and every merchant looks to capitalize on the all-important Christmas season. Then, after Dec. 25, there's a lull, as the busy period for shoppers subsides and business goes back to normal.

At least that's the conventional wisdom. But here's the thing - after the holiday shopping season ends, a new season begins in its place. That would be the holiday return season.

People return their holiday gifts for any number of reasons. Perhaps they received items that they already have, and they don't need duplicates. It might be a matter of an article of clothing not fitting. Maybe, quite frankly, they just don't like their gifts very much. Whatever the reason, people are returning items by the millions. According to ABC News, approximately one-third of all online shopping transactions resultĀ in returns this holiday season. In other words, the period immediately following Christmas is busier than you might think.

It's important for businesses to ensure data quality as they're tracking all of this business. Just as retailers work hard to gather information about their holiday sales, figuring out who's buying what and why, they also need to be aware of their returns. Why aren't their sales successful? What leads people to send back the items they receive as holiday gifts? By tracking accurate information about these all-important questions, all retail companies can improve their practices between now and next Christmas.

A focus on e-commerce
ABC News noted that online purchases make up a significant portion of companies' post-Christmas returns. The news source reported that as per National Retail Federation data, $58 billion in goods were returned this holiday season, and while exact numbers on e-commerce's slice of that pie were not available, it's likely substantial.

Further NRF survey data indicated that online sales increased this year by between 13 and 15 percent, and with these sales, it tends to be more difficult to predict whether the gift recipient will like the item, as noted by Thayer Meicler, co-founder of location-based app SaleSorter.

"I would imagine the rate of in-store returns is much smaller than online because consumers know exactly what they are buying when they pick something out in stores, so there are far fewer surprises," Meicler told ABC.

It's important for retailers to track their holiday returns. If they have comprehensive information on who's sending back what items and why, they can improve their sales practices, and perhaps their outlook will be better in 2014.