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2020 Hindsight: Is Your Business Ready for the Black Friday Returns Wave?

by Laura Gee


returns-waveIt's been a few years now since the Black Friday retail craze swept its way across the Atlantic to become an annual tradition in the UK.

And if you're running any kind of retail business, you'll know exactly how hectic the aftermath can get.

The Black Friday discounts bring in a huge wave of sales. But just a couple of weeks later, the returns start flooding in – and with the Christmas delivery deadlines painfully close, it's a mad rush to get those returned items restocked and ready to sell in time for the holidays.

This 'Crimbo Limbo' is a logistical nightmare for retailers all over the country, with returns from Black Friday weekend alone racking up an estimated financial impact of £606 million for online retail in 2019.

With a few Black Friday’s under our belt, we've learned a thing or two about that mad rush from looking at the data. And we're ready to pass on our knowledge and predictions to help you prepare for what's set to be one of the most hectic aftermaths so far as the UK braces for its first ever purely online Black Friday.

But before we think about what’s in store for this Black Friday, we need to learn from the past. So let's start by taking a look back into 2020 and 2019 – to see exactly where we're heading for Black Friday this year.

It's been a generous year for returns policies

Due to the ongoing pandemic, 2020 has seen long return windows become an industry standard in the retail sector.

At the end of March this year, data from IMRG showed that 43% of retailers were advertising an extended returns policy in response to Covid-19 – with the kind of return policies we normally only see at Christmas. In most cases, that means businesses have extended their returns to a 60-day window (compared to the more usual 14 or 30 days).

That's great news for shoppers. But these retailers aren't just doing it out of the kindness of their hearts.


Longer returns policies are good for business

We regularly carry out mystery shops in the retail sector to help us understand the experiences of shoppers. From our own data, we've found that 28% of shoppers feel more valued by a retailer that offers a generous returns window – and when a shopper feels valued, they're more likely to recommend that company to their family and friends, increasing that all important NPS score.

Better yet: a generous returns policy can have a positive effect on your shoppers, even before the sale. According to a study by Shopify, the promise of a 30-day return policy can increase your sales conversion rate by as much as 57%!

You might think that a longer returns window means a massive added delay in getting your returns back. But in reality, a more generous policy has only a small effect on the time it takes for shoppers to complete their returns.


Returns can slow down – but not by much

Looking at data from a cross-section of ReBOUND clients, we found that shoppers with a 60-day window took an average of 15.85 days to send their items back – while shoppers with a 30-day window took 12.25 days.

That means that, on average, a retailer that doubles their policy length only adds a couple of days to the timeline in which most shoppers send their items back.  Our recent survey of 500 UK shoppers revealed that 77% expect a retailers returns policy to be 30 days or more – which means the positive benefits of customer satisfaction and loyalty could easily outstrip the potential negatives. 


What happened with Black Friday last year?

From our own data and analytics of our retail clients, we know that the average shopper took 12 days to send their returned items back in 2019.

If we break that down, it took an average of 9 days for shoppers to register their return online with the portal, and then a further 3 days to drop off their products at a collection point.


Let's put that data into practice:

Last year, Black Friday fell on November 29.

If we assume a best case scenario, and that every shopper had next-day delivery, that means shoppers received their products on November 30.

We know it took an average of 12 days for shoppers to send back their returned items, so it was already December 12 before the products started making their way back to the retailers. (Getting nervous yet?)

Let's give the carriers and retailers 3 days to transport and process the goods. That takes us up to December 15 – and last year's Royal Mail delivery windows started kicking in on December 18.


So what did that mean for a Black Friday retailer in 2019?

It means they had just 3 days to restock their returns, make a new sale, and get the product shipped out in time for Christmas.

(That's assuming that everyone had next-day delivery. In reality, many of these retailers had even less time.)

If that sounds like an incredibly tight turnaround, that's because it is. And this year, we're expecting that slim window to become even more of a challenge.

It’s no surprise that many retailers now begin their Black Friday sales early, with some running discounts throughout the whole of November to ease warehouse and delivery pressures. This year,  IMRG is tracking 320 retail sites throughout November, and have found that some retailers already have their deals underway. On 9th November 2020, 10% of the retailers had their Black Friday deals live, compared to just 3% at the same time in 2019.



What's the prediction for 2020's Black Friday?

With the ongoing Covid-19 situation, a huge number of retailers have been offering longer returns policies to their customers. And from our own data at ReBOUND, we know that a longer returns window means shoppers usually take a little more time to send their products back.

But in 2020, things are shaping up to be a little more intense:


Covid-19 could slow everything down

This year's Black Friday falls on November 27. That's two days earlier than last year, which should help to give retailers a little extra wiggle room.

But with the current situation (and the recent new lockdown restrictions in the UK), shoppers are less likely to be making extra trips out of the house. They're likely to hold onto their Black Friday returns a little longer, so they can drop them off while they finish their other important errands, like their Christmas essentials shopping.

So for this Black Friday, you should expect your returns to take even longer than usual to make their way back to you – giving you even less time to get them back on the shelves.


The delivery deadlines could be earlier than ever

It's been a big year for internet sales, with IMRG predicting that sales will increase between 35% and 45% this Black Friday, compared to Black Friday 2019  – and we anticipate it's likely to keep growing as we head into the biggest shopping period of the year.

That's the kind of demand that puts a huge amount of pressure on carriers. So we could see the guaranteed delivery deadlines for the holiday period starting earlier – creating an even tighter squeeze for retailers to get their products back out in time for Christmas shoppers.


So what should businesses be doing now?

We've seen just how tight the turnaround windows can be for returns after Black Friday. And this year, that narrow opening could be even more constricted.

If you've made it this far, we hope we haven't scared you too much. Because there are still plenty of things you can do to help take the pressure off your business during a challenging part of the year.

Here's what you need to know:

1.   Start your discounts earlier

Saving up all of your discounts for a single weekend means cramming a huge amount of sales into a short space – and that means multiplying the struggle you'll face when a portion of those items are returned.

So if you want to make life easier, spread out your returns over a longer period by starting your Black Friday discounts at an earlier date.

The longer you hold onto your discounts, the more products you're putting into the danger zone – and the higher your risk of being stuck with unsold goods.


2.   Make your returns as easy as possible

We've seen from our data that the biggest chunk of lost time usually comes from the shoppers themselves. (Remember the average of 12 days to drop off returned goods?)

So if you want to see your returned products coming back as soon as possible, do everything you can to make your returns as simple and seamless as they can be.

That could mean adding home collection options so your customers don't have to leave the house (which should be especially useful with this year's lockdown restrictions).

Or it could mean adding drop-off points that are a part of your customers' everyday routines – like Asda Toyou


3. Continue the spirit of generosity

Your festive generosity doesn’t have to end with an extended returns policy.

It’s inevitable that returns will continue to flood in throughout January and February as shoppers get around to sending back their Black Friday impulse purchases and unwanted Christmas gifts.

Even after you’ve given yourself every opportunity of selling items at rock bottom prices in the January Sales - and having them kept - you may still find yourself lumbered with surplus stock. 

Continue the season of giving by shifting your thinking towards more sustainable ways to clear your warehouse of the excess by regifting the items instead. 

ReBOUND has partnered with In Kind Direct, who work tirelessly to deliver essential items to over 10’000 charities who need them most. You can learn more about regifting products through In Kind Direct here. 

Is your business ready to learn from the past?

Black Friday returns are a huge challenge for any business that sells online (with or without a global pandemic!)

But with the right knowledge and data behind you – and the foresight that comes from analysing past activity – you can be sure you're in the best possible position to prepare and react.

So if you're looking for the kind of actionable reports that can help you reduce your losses, compare your promotions, and truly understand the habits and behaviours of your customers, a powerful analytics tool like ReBOUND Insights could be exactly what you're after.