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Online Returns in the UK | Verdict Channel Report

Summary

Growing online returns is an unavoidable consequence of online retail growth; however, some sectors have become more susceptible to changing consumer habits than others. This report analyses online returns by sector and by delivery size, as well as trends and shopper profiles.

Key Findings

  • Make informed investment decisions by utilising 2014 returns data & 2019 forecasts, based on inputs including Verdict's survey of 10,000 UK shoppers.
  • Learn which shoppers to avoid by identifying them via our online shopper profiles of those that return by sector.
  • Understand the key issues and opportunities in technology than can help to lower returns in the clothing & footwear sector.
Synopsis

The value of returned products from online purchases in the UK is forecast to grow by over 50% between 2014-2019. While the growth of online shopping is a key driver of this, retailers’ investment in offering free and easy returns via multiple methods has also aided growth as shoppers opt to make multiple purchases knowing they can return easily.

Clothing & footwear returns are significantly higher than in any other sector – almost three times the size of electricals. Fit and sizing remain the key reasons for customer returns, despite retailer investment in improving images and product information. Virtual fitting room technology is a must to give shoppers the confidence to buy.

The strength of Black Friday trading in the UK not only changed the phasing of spending in the run up to Christmas, but it also altered the returns market. Wider choice of returns methods and a greater understanding of the impact of promotional activity on returns are required in order to avoid delays to the returns process.

Reasons To Buy
  • What is the size of online returns in the UK and how fast will they grow in the next five years?
  • Which customers are the most likely to return online purchases and what sectors do they shop in?
  • What are the most common reasons for online returns?
  • What are the most common methods of returning online purchases?
  • As a clothing & footwear retailer, how can I minimise returns?


  • Overview
  • Outlook
    • Growing volumes and ease of returns increase value of returns
    • Multichannel clothing & footwear retailers exposed to high returns
    • Larger returns dominate
    • Majority of returns are made via the Post Office, but PUDO sees strongest growth
    • More product detail could reduce returns
    • Anticipating peak returns volumes imperative
    • Charging for returns now an outdated view
  • Market Summary and Forecast
    • Market forecast
      • Table Returns market size (£m) and growth rates (%) by sector, 2014 and 2019e
      • Table Value of online returns by size (£m), 2014
    • Clothing & footwear shoppers most likely to return goods
      • Clothing & footwear penetration more than double that of all other sectors
    • Method of return
      • Table Ways that purchases were returned (%), 2014
    • Reason for return
      • More detail on product could reduce returns
        • Table Why purchases were returned (%), 2014
  • Trends
    • Investment in delivery must be replicated for returns
      • Retailers must meet consumer demand for choice of returns methods
      • Charging for returns to be phased out
    • Preparation imperative ahead of peak returns periods
      • Strong discounting culture weighs heavily on returns market
      • Unprecedented volumes generated by Black Friday
      • Lessons to be learned
    • Visibility is key to quicken the returns process
    • Avoiding shoppers that return frequently
    • Tackling returns vital for clothing & footwear retailers to protect margins as returns soar
      • Invest in 3D technology during product design
      • Video catwalks make the most impact
      • Adoption of virtual fit technology to grow
      • Fewer footwear players seize opportunities to aid customers on sizing
  • Sector Analysis
    • Books
      • Low returns in books sector
    • Clothing & footwear
      • Clothing & footwear returns highest in the market
    • DIY & gardening
      • Low returns growth
    • Electricals
      • Considered electricals purchases result in fewer returns
    • Furniture & floorcoverings
      • Augmented reality will help to diminish furniture & floorcoverings returns
    • Food & grocery
      • Low returns in food & grocery sector
    • Health & beauty
      • Health & beauty returns limited by replacement purchases and retailers refusing returns
    • Homewares
      • Rise in return of smaller homewares items
    • Music & video
      • Music & video returns limited due to downloads
  • Methodology
    • Collection and returns
  • Appendix
    • About Verdict Retail
    • Disclaimer

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