20 Jan How does Covid-19 influence returns behavior?
Borgholzhausen, January 20, 2021 – It is reported again and again: Corona brings enormous growth to many e-commerce players. By the fourth quarter of 2020 alone, e-commerce sales rose by over ten percent compared to the same period of the previous year. Do more orders necessarily mean more returns? Not necessarily, as the study “Changes in return behavior during the Covid-19 pandemic” by the Returns Management research group at the University of Bamberg found for the first six months of the pandemic.
More orders, more returns?
The Bamberg study can confirm this in absolute numbers. Because extrapolations showed around 315 million return packages in the period from March to August 2020, an increase of 4.6 percent. In relative terms, however, the return rate fell from 17.8 to 15.9 percent – and that despite the observation of more frequent multiple orders from different companies according to the motto “Whoever delivers masks, disinfectants and the like first, wins”. Retailers from the fashion and furnishings clusters in particular are happy about more profitability thanks to high order numbers on the one hand and a low return rate on the other. While almost half of all items of clothing were returned in the same period last year, in the first months of the pandemic it was only just under 41 percent. And furnishings that had been ordered were also allowed to stay in their own homes more often: with a decrease of 1.92 percentage points.
Afraid of the corona return?
According to the study, this development can be attributed in particular to the changed shopping behavior of German consumers. Much more than in the previous year, products for daily needs were ordered for which a generally lower return rate is to be expected – in the second quarter of 2020 this segment grew by over 50 percent. With the lockdown and the health insecurity associated with shopping for many, new customer groups were tapped who previously increasingly shopped in brick-and-mortar stores and thus exhibited less pronounced return behavior.
But lockdown and health risks not only brought new customer groups and general sales growth to online retail. Apparently, these aspects also inhibited consumers from accepting returns. Because if you are not sure whether you can leave the post office without being infected or whether the parcel shop is actually allowed to be open, you want to minimize returns and thus the reasons for returns on their own initiative.
Not just less, but later too
An additional trend that the study describes is the time of the return. This was often postponed and more retailers report that customers are more likely to return at the end of the granted return period. More time spent by the customer with the article enables more extensive testing and influences the decision not to send an article back after all. However, if he does decide to do so, more items with obvious signs of use came back to the dealers or logistics service providers during the period under investigation. 24 percent of the retailers surveyed report an increase in such articles. And the number of articles that could only be recycled or even disposed of increased as a result.
The Returns Management research group would like to analyze in future surveys whether these effects are temporary or even permanent. We are excited!