Peak Retail Season 2022: A Look Back at Product Return Trends and Expectations
As we look back at peak season 2022, it’s clear that this year was unique in many ways. Spanning from October all the way through New Year’s eve, this period usually marks a significant jump in sales as people buy costumes and outfits for the holidays as well as presents for their loved ones. With COVID-19 still affecting supply chains around the world and weakening the economy, it was difficult for retailers to predict what peak season would be like towards the end of 2022 and into 2023. Especially when economic issues and inflation, which have lowered consumer buying power and triggered a cost-of-living crisis, made it difficult to predict how consumers would approach the holidays. Would they still be willing to spend money on holiday shopping despite the economic uncertainty? Would returns be higher or lower than in previous years?
How High Were Sales Volumes?
As it turns out, the answers to these questions were not what many retailers expected. Despite the ongoing economic challenges, retailers saw strong sales during peak season 2022. According to Forbes, Black Friday online sales were up 2.3% compared to 2021, with $9.12 billion spent online. Data from Salesforce supports this, showing a 5% increase in sales in 2022 compared to 2021. This suggests that many consumers were still willing to make and even increase holiday purchases, despite lowered spending power and inflation.
What Happened with Returns Towards the End of 2022?
However, while sales were strong, returns were also higher than in previous years. Our data shows that in November 2022, there was a 26.6% increase in return volume compared to November 2021. The last week of November saw 8% more returns than the first week of December. And during the Black Friday weekend (Friday – Cyber Monday), there was a 20.3% increase in return volume compared to the same period in 2021. The trends in our return data seem to match Salesforce, who measured a 63% increase in returns YOY.
So why were return volumes higher this year, and earlier than expected? One possible explanation is the cost-of-living crisis and inflation. With many consumers facing financial uncertainty, they may have been more cautious about their spending and therefore more likely to return items that they didn’t need or couldn’t comfortably afford. According to a report by DHL, 42% more shoppers worldwide planned to start buying gifts earlier during the 2022 holiday season before prices increased further. With many retailers starting their Black Friday discounts earlier than usual, consumers may have been more inclined to take advantage of those deals and then return items earlier than usual.
What Were the Final Return Results in January 2023?
It’s worth noting that January is traditionally the biggest month for returns. This is because many brands extend their return policies, taking away the urgency of consumers to rush their returns. And as January 2023 passed us by, it was initially unclear exactly what return volumes would look like for the retail sector. Retailers braced for high return volumes, and it’s a good thing that they did. Our data indicates that returns were 20% higher in January 2023 than January 2022, proving the unfortunate predictions that high volumes would continue into 2023. Now that January is over, retailers can begin to relax knowing that return volumes will probably become more stable throughout the rest of the year, that is, until peak season hits again this year.
How to Prepare for Peak Season 2023
So, what can retailers do to prepare for peak season 2023 and beyond? One important step is to review our peak season returns checklist and implement a peak season strategy well ahead of time, so you aren’t scrambling at the last minute. This includes things like optimizing product descriptions, using high-quality product photos, and making sure you have a clear and detailed return policy. Additionally, it’s important to have systems in place to quickly divert returned items back to shelves and recondition items as necessary. And, last but not least, consider working with a returns management specialist like ReBound . We can help you streamline your returns process and increase revenue, by fully managing your end-to-end return processes so returned items arrive back to your warehouse ready to be resold immediately. With our smart technology, simple processes, and scalable network, we enable you to be agile in managing your returns no matter your return volumes. Contact us to find out how we can help you future-proof your returns solution.