Description

This report provides comprehensive and current information and analysis of the return process in online shopping market including return process in online shopping market size, anticipated market forecast, relevant market segmentation, and industry trends for the return process in online shopping market in the US.

Current market landscape

Returns are an inevitable part of the online shopping experience, and as many as 81% of consumers have returned an online purchase. Consumers have a variety of reasons for making returns, with fit issues and product quality being some of the most common. Free returns are the prevailing standard, and consumers are not backing down on return fees, a challenge to retailers amid higher levels of ecommerce.

Online sales tend to have a higher return rate than in-store purchases, as consumers are unable to see, touch or try on items before purchasing. Thus, a rise in ecommerce activity amid the pandemic saw online returns reach new highs, creating challenges for retailers as they grapple with how to manage reverse logistics in a rapidly growing ecommerce channel. As online sales begin to cool from record levels, retailers have an opportunity to level set on their ecommerce operations to improve how they manage returns and other aspects of the post-purchase experience.

Market share and key industry trends in online shopping returns

  • Returns are common, but most consumers try to avoid the need: 81% of consumers have returned an online purchase, but over half (55%) return rarely. Fewer than 10% do so regularly, suggesting that consumers try to keep returns to minimum.
  • Most consumers send online returns by mail: 72% of consumers sent online returns back in the mail. Nearly half (49%) of consumers return in the store, though moms and suburban shoppers are most likely to do so.
  • Consumers stand their ground on free returns: Free returns are important to nearly 70% of shoppers. More than that, 61% of consumers are opposed to paying postage or return fee.

Future market trends in return process in online shopping

A retailers’ return policy is important to virtually all consumers, and negative experiences can have steep consequences, leading consumers to shop elsewhere. Looking ahead, brands and retailers must recognize that the post-purchase journey is as critical to the customer experience as the initial purchase. Free and flexible returns, tech integrations to better manage returns and helpful customer service will be vital components to delivering a convenient and efficient return experience.

Read on to discover more about the return process in online shopping consumer market, read our Role of Tech in eCommerce – US – 2022, or take a look at our other Ecommerce research reports.

Quickly understand

  • Impact of economic headwinds on online returns.
  • How, when and why consumers return online purchases.
  • How return policies influence consumers’ online shopping behaviors.
  • Consumer attitudes toward returns and retailer return policies.
  • Consumers’ common issues with returns.
  • Desired improvements to the online return experience.

Covered in this return process in online shopping market report

Brands include: Walmart, Ulta, TryNow, Greenlist, Floyd’s, Shopify, Eddy Bauer, Loop, Chewy, Rothy’s, Amazon, Kohl’s, Happy Returns, PayPal, Snapchat, Nike, YouTube, Zara, TechCrunch, DoorDash, Nordstrom, UPS, FedEx, Athleta, Brooks Brothers, Levi’s, Macy’s, DSW, Saks Fifth Avenue, Patagonia.

Expert analysis from a specialist in the field

This report, written by Brittany Steiger, a leading analyst in the Retail and eCommerce sector, delivers in-depth commentary and analysis on return process in online shopping market share to highlight current trends and add expert context to the numbers.

Surging ecommerce demand has fueled record volumes of online returns, contributing to a growing challenge for retailers. Returns are an essential part of the online shopping journey, and the bar has been set with free returns. Retailers must manage returns by improving the online shopping journey, adding flexibility and investing in processes that drive efficiency and boost customer loyalty.

Brittany Steiger Senior Analyst, Retail & eCommerce
Brittany Steiger
Senior Analyst, Retail and eCommerce

Table of Contents

  1. Overview

    • What you need to know
    • This Report looks at the following areas
    • Definition
    • Market context
  2. Executive Summary

    • Top takeaways
    • Market overview
      • Figure 1: Outlook on online returns, 2022-27
    • Opportunities and challenges
    • Focus on the online shopping journey to mitigate returns before they happen
    • Free returns have profit implications
    • Make sustainability a priority and consumers will follow
    • Key consumer insights
  3. Market Perspective

    • Online returns reached $218 billion in 2021
      • Figure 2: US retail returns, total retail and online, 2019-21
    • Returns fraud is a growing problem
    • Holiday returns account for 20% of total returns
  4. Market Factors

    • Increased ecommerce sales spawned higher return rates
    • Economic headwinds bring uncertainty for consumers and retailers
    • Rising prices strain consumer spending
      • Figure 3: Consumer Price Index change from previous year, 2020-22
      • Figure 4: Disposable personal income change from previous period, 2007-22
    • High fuel prices make returns more costly for retailers
      • Figure 5: US gasoline and diesel retail prices, 2007-22
    • Climate anxiety calls for sustainable solutions
    • Technology brings solutions to mitigate returns
  5. Competitive Strategies and Market Opportunities

    • AR and virtual try-on helps solve the fit challenge
      • Figure 6: Walmart expands virtual try-on with “Be Your Own Model”
    • Lean on partnerships to expand in-person return services
      • Figure 7: Ulta partners with Happy Returns to expand return services
    • Factor at-home trial into the ecommerce model
      • Figure 8: TryNow “try before you buy” platform
    • Get serious about sustainability
    • Peer-to-peer returns offer a greener way to return
      • Figure 9: Shopping plug-in Greenlist facilitates peer-to-peer returns
    • Leverage circular platforms to resell returned merchandise
      • Figure 10: Floyd’s circular platform “Full Cycle” gives retuned furniture a second life
    • Look within to build an effective returns strategy
    • Improve product descriptions to paint a clear picture online
    • Tie returns benefits into loyalty programs to expand VIP benefits
    • Invest in reverse logistics operations
  6. The Consumer – Fast Facts

  7. Online Shopping Overview

    • Most consumers are heavy online shoppers
      • Figure 11: Online shopping frequency, 2022
    • Profiles of heavy online shoppers
      • Figure 12: Heavy online shoppers, by key demographics, 2022
    • Consumers are increasingly shopping from smartphones
      • Figure 13: Devices used for online shopping, by generation, 2022
  8. Return Frequency

    • Most consumers return but a majority do so rarely
      • Figure 14: Online return frequency, 2022
    • Profiles of “regular” versus “never” returners
    • Regular returners may be the most loyal customers
      • Figure 15: Regular returners versus never returners, by key demographics, 2022
    • Dads return more often than any other consumer group
      • Figure 16: Return frequency by gender and parental status, 2022
  9. Categories Purchased and Returned

    • Apparel tops the list of categories purchased and returned online
      • Figure 17: Categories purchased and returned online, 2022
    • Solutions require outside-the-box thinking
      • Figure 18: Eddy Bauer’s (Re)Adventure circular platform gives returns resell value
    • Dads are the returns taskmasters
      • Figure 19: Categories returned online, by gender and parental status, 2022
      • Figure 20: Loop Returns platform redefines returns
    • Lower-income households more likely to return lower-ticket items
      • Figure 21: Select categories returned online, by household income, 2022
      • Figure 22: Chewy customer shares positive returns experience
  10. Return Methods

    • Consumers return in a variety of ways; by mail is the most common
      • Figure 23: Return methods used, 2022
      • Figure 24: Rothy’s Happy Returns testimonial
    • Women are more likely to return in the store
      • Figure 25: Return methods used, by gender and parental status, 2022
      • Figure 26: Amazon highlights the ease of in-store returns on social media
    • Where consumers live plays a factor in return behaviors
      • Figure 27: Return methods used, by geographic location, 2022
  11. Reasons for Returning

    • Fit is the number-one reason consumers return
      • Figure 28: Reasons for returning, 2022
      • Figure 29: Snapchat estimates the impact of AR on returns
    • Young consumers are savvier about shopping and returns
      • Figure 30: Reasons for returning, by generation, 2022
    • Women more likely to return due to quality and fit
      • Figure 31: Reasons for returning, by gender, 2022
  12. Behaviors & Preferences: Online Shopping and Returns

    • Return concerns influence how consumers shop online
      • Figure 32: Online shopping and return behaviors, 2022
    • In their own words: consumers share return behaviors
    • Men are less engaged with product reviews and more discriminating about return policies
      • Figure 33: Online shopping and return behaviors, by age and gender, 2022
    • Fit concerns drive bracket buying behaviors
      • Figure 34: Online shopping behaviors – Bracket buying, by key demographics, 2022
  13. Impact of Return Policy on Shopping Behaviors

    • Retailer return policies are an important factor in shopping decisions
      • Figure 35: Return policy importance, 2022
    • Black and Hispanic consumers place importance on return policies
      • Figure 36: Return policy importance, by race and Hispanic origin, 2022
    • Free returns are most important
      • Figure 37: Important return policy factors, 2022
      • Figure 38: Zara begins charging for online returns in the U.K.; DoorDash offers returns as a service
    • Younger consumers want more flexibility
      • Figure 39: Important return policy factors, by generation, 2022
    • Convenience matters for parents
      • Figure 40: Important return policy factors, by gender and parental status, 2022
      • Figure 41: UK-based Morrison’s and Next partner to launch delivery and return pods
  14. Common Issues with Returns

    • Issues with returns are mixed
      • Figure 42: Common issues with returns, 2022
      • Figure 43: Nordstrom Local hubs service returns
    • Gen Z and Millennials have high expectations
      • Figure 44: Common issues with returns, by generation, 2022
      • Figure 45: DSW’s VIP return policy ties return benefits to shopper loyalty
    • Financially strained households need more support
      • Figure 46: Common issues with returns, by household financial health, 2022
  15. Attitudes toward Online Returns

    • A negative returns experience leads to attrition
      • Figure 47: Select attitudes toward online returns – Negative experience, by generation, 2022
    • Consumers are adamantly opposed to return fees
      • Figure 48: Attitudes toward returns – Return fees/postage, by key demographics 2022
    • In-store returns allow service to shine
      • Figure 49: Select attitudes toward online returns – In-store preference, by generation, 2022
    • Time(frames) are of the essence
      • Figure 50: Select attitudes toward returns – Return timeframes, by generation, 2022
    • Consumers crave features that improve shopping and mitigate returns
      • Figure 51: Select attitudes toward returns – Shopping features, 2022
    • Awareness of the environmental impact is increasing
      • Figure 52: Attitudes toward returns – Sustainability, by generation, 2022
      • Figure 53: Patagonia “Worn Wear” repair and resale program
    • Returns can be a hassle
      • Figure 54: Attitudes toward returns – Convenience, by gender and parental status, 2022
  16. Improving the Returns Process

    • Free returns are a sticking point, but ease and flexibility matter too
      • Figure 55: Desired improvements to the online return process, by generation, 2022
    • Consumers want retailers to meet them where they are
      • Figure 56: Desired improvements to the online return process, by geographic location, 2022
  17. Appendix – Data Sources and Abbreviations

    • Data sources
    • Consumer survey data
    • Consumer qualitative research
    • Abbreviations and terms
    • Abbreviations
    • Terms
  18. Appendix – The Consumer

      • Figure 57: Online shopping frequency, by generation, 2022

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