Unwanted gifts bought over Black Friday and Cyber Monday could cost retailers a shocking £400 million, according to software solutions specialist Fabacus.
The four-day shopping bonanza will see an estimated £1.96bn spent in store and online, the company said.
Yet returns from products bought over the long weekend can reach 40% – and potentially more for fashion goods.
Andrew Xeni, founder and chief executive of Fabacus, said: “The cost of returned items can be absolutely huge – both in terms of processing packages and with the opportunity cost of having stock tied up. Many consumers will buy several sizes of the same item because of inconsistencies in labelling. By using technology to streamline garment technology and supply chain management, brands can iron out these issues and become far more efficient.
“Being able to prioritise inventory may not sound particularly sexy, but it’s fast becoming business critical when it comes to managing e-commerce effectively.”
Returns are a massive cost for retailers. Globally, returns cost the sector just over £500 billion a year. The potential savings to be made from tightening up return processes and streamlining supply chains could save many retailers in the face of mass high street closures and the declining value of the pound.
Through embracing technology in the retail sector, retailers could save millions on Black Friday and Cyber Monday returns. By having software that provides supply-chain oversight and real-time data reporting, retailers can adjust their capacity and sourcing according to the current demand. Supply-chain flexibility and agility are essential qualities for retailers that are hoping to flourish in today’s competitive market.
Xeni said: “Just by adopting tech into their businesses, retailers could save themselves millions of pounds on Black Friday and over the festive period. Current retail supply-chains are cumbersome and notoriously complicated but tech can help simplify them. More streamlined and efficient supply-chains mean than retailers have the agility to deal with fluctuations of demand over intense retail periods such as Black Friday.
“Real-time data and analytics can help companies measure the speed at which their stock is moving in and out of their stores. Such oversight gives retailers the ability to optimise their capacity and allows manufacturers to better plan resource and output, maximising margins for all parties.”