Author – Breakthrough Retailing, How a bleeding orange culture can change everything!
January 6, 2025
Rich McMahon of cda Ventures recently posted; “As we wrap up another holiday shopping season, retailers are bracing for an unprecedented wave of returns. In 2025, it’s projected that a staggering $170 billion worth of merchandise, or about 18% of total sales, will be heading back to retailers. This surge in returns is partly fueled by the rise of mobile shopping, which is expected to account for 70% of all e-commerce sales next year and typically sees a 20-40% return rate. The financial impact is enormous, with returns estimated to result in $890 billion in lost revenue for retailers in 2024.”
This is pretty scary stuff especially for the DTC [Direct to Customer] provider.
Now Dan Berthiaume at Chain Store Age reports that; “Amazon offers free returns – no packaging required” [https://chainstoreage.com/amazon-offers-free-returns-no-packaging-required] “Amazon says that most returns do not need to be packaged or labeled by the customer. For each boxless return option listed, customer can select their preferred drop-off option and bring their return QR code and an item[s] to the selected location. In most cases, customers don’t need to provide boxes or labels as the associates at each drop-off location will handle all the packing, labeling, and shipping.”
This seems like Amazon is putting another nail in the coffin of the DTC retailer by, once again, setting customer expectations for services that increase the costs of fulfillment for so many DTC providers who already struggle to obtain any kind of ROI from their online sales.
How do DTC providers who are already suffocating with return goods, not to mention facing consumer fraud and escalating customer acquistion costs make economic sense of their business going forward?
Amazon continues to double down on promoting a model that provides logistic and advertising income for them, but puts more and more stress on the DTC retail business model as this laissez faire return policy accelerates an already out of control return goods calamity