eCommerce is growing at an astounding rate, 14% in 2014 alone, creating a $1.5 trillion industry.
Unfortunately for online retailers, ROI can mean Return Of Inventory more than it can mean Return On Investment.
This holiday season, Deloitte projects online returns will EXCEED 30% of all purchases, which does not bode well for businesses counting on online sales to drive profit margins higher.
Contributors to the high rate of returns include:
- items do not fit
- the incorrect item was shipped
- the items arrived damaged
- the product was not what the buyer expected
Conversely, brick-and-mortar retail stores see less than a 9% return rate on average, due to the ability to see/touch/try on merchandise before they purchase.
The infographic below explains in more detail the benefits brick-and-mortar stores provide over online retailing that contribute to the delta between return rates for both channels.