Winning Over Customers Before the Holiday Season: Strategies for Retailers

Implementing user-friendly return policies, alongside other strategic measures, can facilitate customer transactions and aid retailers in seizing a portion of the anticipated $1.58 trillion in holiday season sales.

Prepare yourselves, merchants—consumers are approaching the festive season with fervor.

Projections indicate that customers will allocate over $1.5 trillion towards holiday expenditures this year, as per a recent Deloitte study, denoting a 1 percent decline in the sales growth rate from the previous year. Despite inflationary pressures on consumer budgets, Akrur Barua, an economist at Deloitte Insights, remains optimistic regarding the forthcoming retail season. “While the surge in holiday sales is projected to decelerate compared to the prior period, healthy increases in disposable income, coupled with a stable labor market, are poised to underpin a robust holiday sales season,” he remarked in the report.

To maintain competitiveness, businesses ought to contemplate liberalizing their return policies to cater to financially constrained clientele, according to Blue Yonder. Insights reveal that 91 percent of consumers’ purchasing decisions are influenced by return policies.

One innovative approach adopted by enterprises to streamline return processes for customers and inventory management involves allowing clients to retain the merchandise they intended to return. Approximately 72 percent of customers disclose receiving this recommendation from retailers as an alternative to standard return protocols.

Stringent return regulations dissuade nearly 70 percent of consumers from making purchases altogether. The most bothersome aspects of return transactions include return fees (50 percent), limited return timeframes (27 percent), mandatory in-store returns (15 percent), and product restrictions (8 percent).

When returns necessitate shipment back to the warehouse, third-party return services offer a viable solution for business proprietors. Over 62 percent of respondents express a willingness to engage with third-party services if they offer reduced or waived shipping expenses, with an additional 47 percent willing to do so in exchange for expedited reimbursements.

Although striving to prevent returns altogether is preferable, it remains impractical, with a third (34 percent) of consumers routinely partaking in return procedures throughout the year. Common factors prompting returns encompass incorrect sizing (75 percent), damaged goods (68 percent), and changes of preference (49 percent). Enabling diverse return channels for customers could serve as a retention tactic for retailers during the festive period.

“Businesses concentrating on fortifying consumer loyalty and trust are well-positioned for success,” remarks Michael Jeschke, Deloitte Consulting principal and leader in retail and consumer products. Pioneering a comprehensive holiday returns strategy promptly can facilitate the cultivation of consumer allegiance and trust.