Gartner Research

Get a Grip on the Hidden Cost of Retail Returns by Creating Visibility and Ownership

Published: 04 March 2015

ID: G00270257

Analyst(s): Tom Enright

Summary

Retail returns are rising rapidly, but the cost is often hidden in supply chain rather than impacting individual product profitability. This research provides merchandising and supply chain leaders with a way to highlight the true costs of returns to address their impact.

Table Of Contents
  • Impacts

Analysis

Impacts and Recommendations

  • Many retailers are recording returns as a supply chain cost, obscuring their impact on product performance profitability
  • Retailers often focus on gross sales as a KPI, creating an environment in which the cost of returns is suppressed, and interest in, and ownership of, returns management within the business are limited
  • A small percentage of consumers and assortments generates most returns, making retailers vulnerable to being overrun with returns

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