Holiday returns could rise to $32bn mark, says CBRE
The commercial real estate and invest...
Holiday e-commerce returns could reach as much as $32bn as online sale surge, according to figures from the CBRE.
The commercial real estate and investment firm said e-commerce an increasingly larger portion of holiday retail sales, retailers’ efficiency in limiting and handling returns of merchandise bought online will make or break the holiday season for many.
E-commerce consistently generates more returns than brick-and-mortar retail, partly because shoppers often can’t sample online merchandise before buying it and partly due to the widespread practice of online shoppers ordering several versions of a product and returning those that don’t appeal.
CBRE said that, 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 U.S. online sales this season reaching $107.4bn, up from approximately $93bn last year. By extension, CBRE calculates that the projected ceiling for returns is $32bn, up from roughly $28bn in 2016.
“Speed and efficiency in processing e-commerce returns, with an eye toward preserving as much value of the merchandise as possible, often separates the top-performing retailers from the not-so-successful ones in the weeks after Christmas,” said David Egan, CBRE Global Head of Industrial & Logistics Research.
“This intricate process requires many components, including a precise network of warehouses for handling returns, robust inventory management systems and extensive customer analysis on the front end to limit the probability of returns.”
Those well positioned to thrive in the online-returns market – also called reverse logistics – include third-party logistics firms and owners of 3PL facilities, according to CBRE.
Many retailers opt to contain costs and preserve their retail focus by outsourcing reverse-logistics functions to 3PL firms that specialise in that field.
Gartner: Women in supply chain at five-year high
Women now represent a greater percentage of the supply chain workforce than at any other point in at least the past five years, according to a recent Gartner survey.
The Women in Supply Chain Survey 2021, conducted by Gartner and Awesome, surveyed 223 supply chain organisations with more than $100m in annual revenue from February through to the end of March 2021.
- Women represent 2% more of supply chain workforce than in 2020
- Women now account for 42% of the workforce
- Number of women in exec-level positions declined by 2%
- Just 15% of top leadership are women (17% in 2020)
- 84% of organisations say COVID-19 did not impact efforts to advance women
It found that women now represent two per cent more of the supply chain workforce than in 2020, accounting for 42%, compared with 39% last year. Dana Stiffler, Vice President Analyst with the Gartner Supply Chain practice, says the impact of COVID-19 on supply chain was significant, though different to other sectors.
"Contrary to other industries, supply chain’s mission-criticality during the COVID-19 pandemic has meant that many sectors did not reduce their workforce, but rather continued to hire and even faced talent shortages, especially in the product supply chains," she said. "This resulted in many women not only standing their ground in supply chain organisations but increasing their representation in organisations. We also recorded a record number of specific commitments and supply chain-led actions and saw existing programs starting to pay off."
Supply chain still lacks women in executive leadership
But the elephant in the boardroom remains. Though the figures present a positive step towards greater diversity and gender equality at all levels, the number of women in executive level positions declined by two per cent in the past year. Women represent just 15% of the upper echelons of supply chain leadership. Gartner did however record a rise in women at all other levels of leadership.
The vast majority (84%) of organisations surveyed said the outbreak had no discernible impact on their ability to retain and advance women. But more than half (54%) admitted that retaining mid-career women was becoming increasingly difficult. A lack of career opportunities was cited as the biggest challenge to this, while other blamed a lack of development opportunities.
Despite these challenges, companies of all sizes are becoming broadly better at gender diversity. Around a third more said they had a targeted initiative focused on attracting women and advancing their careers.
Stiffler said a push towards measurable and formal initiatives is at least pointing in the right direction: “It's encouraging to see that the larger share of this jump was for more formal targets and specific goals on management scorecards. For these respondents, there is greater accountability for results — and we see the correlation with stronger representation and inclusion showing up in pipelines.”