This Costly E-Commerce Problem Is Still Unsolved—and Growing

Strasmann: “I don’t see the tiered model happening any time soon because companies are fighting for market share.”

NEWPORT BEACH, CA—Reverse logistics is a rising concern as the percentage of online returns grows with the percentage of online shopping, and whoever solves this problem is a genius, CBRE senior managing director Kurt Strasmann tells GlobeSt.com. According to a recent report from the firm, as e-commerce claims an increasingly larger portion of holiday retail sales, retailers’ efficiency in limiting and handling returns of merchandise bought online—which could amount to as much as $32 billion this year—will make or break the holiday season for many.

Historically, returns of store-bought merchandise have amounted to 8% of total retail sales; however, for e-commerce, that share ranges from 15% to 30%, depending on the product category. Assuming that those percentages hold true, the value of returns this season will increase by the same 13.8% that Adobe Analytics predicts for the increase in online sales this season. Adobe foresees online sales this season reaching $107.4 billion, up from approximately $93 billion last year. By extension, CBRE calculates that the projected ceiling for returns is $32 billion, up from roughly $28 billion last year, putting an ever-greater emphasis on reverse logistics!