Fashion Apparel Merchants Worst Hit by Online Sales Returns: Augusto Beato

Proper handling of reverse logistics should be a main priority for online retailers of fashion apparel due to the surging e-commerce return shipments, especially this holiday season, insists Augusto Beato, CEO of Portland SEO. Beato was reacting to a projection by Industrial real estate experts CBRE that e-commerce return shipments could total as much as $37 billion this holiday season.

Fashion apparel can lose 40 to 50 percent of its value over an eight-to-16-week span after being returned, according to a report by Optoro, a technology company that powers returns optimization for retailers and brands. "Some customers are buying with the intention of immediately returning some of those items," said Beato, who is the CEO of Portland SEO. "Consequently, businesses are adding workers, increasing warehouse space, and establishing separate departments just to handle e-commerce returns."

Merchants seeking to boost their online sales may reach out to Augusto Beato for advice through this link. To learn more on how Portland SEO can boost online sales, click here.

CBRE points out that while the traditional return rate for goods purchased in stores is roughly 8 percent, the rate for online purchases ranges from 15 to 30 percent, depending on the merchandise category. CBRE applied that range to a projection of $123 billion of online sales in this year’s November-December period to arrive at this season’s maximum value of online returns at $37 billion.

That’s markedly more than CBRE’s forecast from last holiday season of $32 billion in online returns.

“The speed and efficiency with which a company can process and resell or dispose of online returns can be the difference between making money or losing it on their holiday e-commerce sales,” notes David Egan, CBRE’s global head of industrial & logistics research.

CBRE teamed with Optoro to generate additional insights into the cost of online returns and value of potential solutions.

Another option is to hire a third-party-logistics (3PLs) firm to handle returns. CBRE found that 3PLs accounted for more than half of the 50 largest U.S. warehouse leases in the first half of 2018.

“With e-commerce sales and returns on the rise, retailers and brands need systems in place to route inventory quickly and efficiently,” says Joe Hsu, senior director of solutions at Optoro. “Using a returns optimization platform can help retailers recoup costs, get inventory back to stock and available for sale faster, and improve the customer experience through faster refunds.”