The hidden costs of online shopping
Inside Retail reported on the hidden costs of online shopping for both consumers and retailers. The article notes that “customer first” is now generally the basis of all retailer strategies. But now retailers are struggling with the consequences of the rush to meet this objective. The return rates from e-commerce are quoted as two to three times higher than those for in-store purchases. Additionally, KPMG found that the cost of handling a return can be as much as three times the cost of delivering the item in the first place. Then there are costs involved in the returns support systems and return fraud is increasing. When you add to the picture the surprising number of additional costs in being an omnichannel retailer, which materially impact margins, it begs the question: how long can the ubiquity of free returns last?