Record US online spending on Black Friday provided a rare bright spot for retailers. There is more to come. Consumers are expected to spend $240.8bn on internet shopping this holiday season, an 8.4 per cent increase from the same period the previous year, according to Adobe Analytics.
But there is a downside to the ease with which Americans can fill up their digital carts these days: the deluge of merchandise returns. It has become a multibillion-dollar problem for the retail industry. Investors should take note.
Online purchases have long had higher return rates than sales at bricks-and-mortar stores. When you cannot try on or see a product in person before buying, you are more likely to change your mind about your purchase.
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