The boom in e-commerce has created a huge new market for truckers and last-mile logistics specialists in the run up to the pre-Christmas peak season.
The flipside of the fourth-quarter peak season rush is a surge in returns at the start of the new year, according to new analysis. In the U.K., this will see truckload demand double in the first quarter of 2020.
“Every year the number of truckloads of returns doubles between January and March following the Christmas period,” said Ben Whitaker, EMEA director at inventory marketplace specialist B-Stock.
He said changes in consumer behavior were driving rising levels of returns with online shopping and customer-friendly returns policies encouraging “shop, regret and return customer behavior.”
Mail service providers also benefit from rising returns. The number of products sent back on the U.K.’s National Returns Day (Jan. 2) was expected to be 72% higher than the average day in December, according to the Royal Mail.
A report published by Statist in July found that the United Kingdom had the third-largest e-commerce market in the world in 2016. The most recent U.K. governmental figures placed the value of e-commerce sales at £586 billion in 2017.
“E-commerce accounted for a 16.5% share of total business turnover in the United Kingdom in 2017,” concluded the report. “By 2021, roughly 93% of U.K. internet users are expected to do online shopping, the highest online shopping penetration rate in Europe.”
A new survey by the charity Barnado’s found that 50% of U.K. adults admit they do not want or use the gifts they receive on Christmas Day. B-Stock said this contributes massively to the yearly total of £60 billion worth of products being returned to U.K. retailers, with toys, specialty kitchen items, tools and women’s apparel the most returned items.
“Online holiday returns are projected to reach rates of around 50% of the total holiday sales figure of £21.22 billion,” said Whitaker.
However, for retailers the embrace of e-commerce is proving a major challenge.
“Retailers are swallowing billions of pounds of profits every year on holiday returns and each year the number is growing,” said Whitaker.
Whitaker added, “With 2019 being a difficult year for retailers, returns place a burden on the retail industry, which is already under pressure to generate profits across the high street and online.”