With the holiday shopping season underway, a new report from CBRE projects a staggering $160 billion—roughly 16% of all holiday retail sales—will be returned this year.
CBRE collaborated with Optoro to estimate the total value of holiday 2024 returns by applying a typical 16% return rate to anticipated holiday sales, which Forrester estimates will reach a record $1 trillion this year. Retailers are increasingly adopting a Buy Online/Return in Store (BORIS) strategy to reduce return costs, which average approximately 30% of each product’s value. In 2023, this approach accounted for 50% of online purchase returns, totaling $123 billion. Additional benefits of the BORIS strategy include better inventory management and improved customer experience.
“Physical stores are no longer just sales hubs; they are becoming essential for efficient returns management,” says James Breeze, vice president of Global Industrial and Retail Research for CBRE. “Leveraging in-store returns will be a game changer for retailers looking to lower shipping and warehousing costs, enhance customer satisfaction and drive foot traffic for additional sales opportunities.”
Key Takeaways:
- Retailers are adjusting their location strategies to prioritize easy returns by choosing neighborhood, community and strip centers that offer convenient customer access with minimal distance from parking spaces to store entrances. CBRE research indicates that leases terms for these locations have increased by an average of 11 months in 2024, reflecting retailers' desire to solidify their long-term presence in prime shopping areas amid low market availability.
- Many retailers are also designing stores with dedicated return sections strategically positioned in the middle or at the back of a store to entice customers with returns to go deeper into the store, thus facilitating more cross-selling opportunities and impulse buys. With e-commerce sales projected to grow significantly, reaching 35% of total retail sales by 2035, demand for physical stores equipped to handle returns and provide enhanced customer service is set to rise.
