Online Returns Are Boosting Retail Demand

Kurt Strasmann is a executive managing director at CBRE.

Online returns a creating more demand for industrial warehouse space located near population centers. According to research from CBRE, items bought in stores have an 8% return rate, while items bought online have a 15% to 30% return rate. Return rates are increasing as online shopping rates increase. Last year, Southern California online retail sales hit $352 billion, a $3 billion year-over-year increase. At the same time ecommerce-related industrial deals in Southern California increased 74%. The report attributes the increase almost entirely to online sales activity.

“As ecommerce continues to pick up, returns will increase in similar ratios,” Kurt Strasmann, executive managing director of CBRE’s Orange County and Inland Empire operations,” tells GlobeSt.com. “It’s so easy to buy multiple items and return whatever you don’t like at really no cost except shipping fees.  The current policy provides consumers with the ultimate flexibility. Therefore, this buying/returning culture is now built into consumers’ thought processes and expectations when buying online. Until ecommerce companies start charging additionally for returns, we expect this trend to continue.”