Holiday E-commerce Explosion – Prepare for Returns Tsunami 2020

December 14, 2020

An unprecedented jump toward online shopping has taken place in 2020, with retailer and parcel carrier logistics networks stressed at capacity while fulfilling the last-mile e-commerce holiday explosion. The traditional holiday retail shopper has turned to online purchasing amidst COVID safety concerns, lockdown restrictions, and widespread shuttering of “non-essential” brick-and-mortar storefronts. 

As 2020 witnessed record breaking numbers in last-mile fulfillment for Black Friday and Cyber Monday, retailers and logistics providers can anticipate equally staggering numbers for e-commerce returns.

The Returns Tsunami

On average, approximately 30% of all online purchases are returned, and during the holiday season retailers expect higher returns rates due to the nature of gift-exchanges. Optoro estimates $100 billion worth of goods were returned in the US during the 2019 holiday season, and Salesforce estimates $280 billion worth of returns in 2020. To put this in perspective, UPS processed over 1 million returns per day during December 2019, a title-wave likely to be twice as large this year as e-commerce has accelerated to 2030 projections.

The Perfect Storm

As cited by Optoro via Vogue Business, mass returns volume will become backlogged for a “perfect storm” scenario as companies introduce significant markdowns, free shipping, and lengthy returns windows – culminating into an unprecedented returns flood 4 – 6 weeks after the initial holiday peak. Instead of Black Friday shoppers camping in front of department stores, online shoppers can expect endless lines extending out of The UPS Store and FedEx Office into the January cold during National Returns Day. Unlike last-mile e-commerce, the first mile of reverse logistics outsources fulfillment to the consumer, creating a universal pain-point in the customer experience where they physically take items to brick-and-mortar locations. Retailers also struggle with returns, losing $50 billion in sales in 2019.

When Waves Collide

The post-holiday season is primed for an interesting intersection of holiday returns and the potential for mass distribution of an approved COVID vaccine. The ability for parcel carriers to adequately service the returns shipments may be in jeopardy, as vaccine fulfillment will take priority. Although there was a dramatic decline in headline department store fist-fights and stampedes, perhaps we’ll witness similar consumer frustration as e-commerce shoppers stand impatiently in line at parcel carrier stores.

How to Ride the Wave with Re-turnz First-Mile Logistics

Re-turnz blends a crowd-sourced driver platform with first mile reverse shipping logistics in eCommerce fulfillment. By utilizing Re-turnz, parcel carriers can reduce mass in-person drop-offs during the post-holiday returns rush:

  • The first mile of reverse logistics now has a safe and at-home solution to move items from unlimited domestic locations to the most efficient disposition location.
  • Brick-and-mortar retailers and parcel carriers have an at-home service that reaches their local customers, all the while centralizing return items at their stores for efficient disposition.
  • Re-turnz diversifies the returns supply chain by deconstructing truckloads through an eco-friendly and new fleet of self-maintained and mission-ready drivers. 
  • Gig-economy drivers reluctant to engage in ride-share during the pandemic era are mobilized to process same-day and omni-channel orders at a rate never experienced before within the logistics industry.  According to an ARC Advisory survey, up to 25% of retailers are now planning to add gig-economy drivers within the next 12 months.
Leadership: Jose Tamez, CEO; T Brandon La Lanne, CTO; Jamie Myers, Director – Product Development 
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