In today’s omnichannel retail landscape, the challenge of returns has grown in both scale and complexity. As consumers move fluidly between digital and physical channels, their expectations for seamless, hassle-free returns have never been higher. For retailers, the stakes are equally significant: returns can erode margins, disrupt supply chains, and undermine customer loyalty if not managed strategically. Yet, with the right blend of data, AI, and digital tools, returns optimization can become a source of competitive advantage—reducing costs, minimizing friction, and even turning returns into opportunities for deeper engagement and upsell.
The rise of e-commerce and hybrid shopping behaviors has led to a surge in returns, particularly in categories like apparel, electronics, and home goods. Consumers now expect to buy online and return in-store, or vice versa, with the same ease and flexibility across all touchpoints. However, many retailers still struggle with disconnected systems, inconsistent policies, and operational silos that create friction for both customers and store associates.
Returns are not just a logistical headache—they are a critical moment of truth in the customer journey. Nearly half of consumers cite easy returns as a key factor when choosing where to shop online. Yet, satisfaction with the returns process remains low, with only 45% of shoppers reporting a positive experience. In apparel, the practice of “bracketing”—buying multiple sizes with the intention of returning those that don’t fit—has become commonplace, driving up costs and complicating inventory management.
Leading retailers are leveraging data and AI to address the root causes of returns and optimize the reverse logistics process. Here’s how:
One of the primary drivers of returns, especially in fashion, is uncertainty around sizing and fit. By harnessing customer data, purchase history, and AI-powered fit recommendation tools, retailers can guide shoppers to the right size the first time. Solutions that ask for basic information—such as height, weight, and preferred brands—can recommend the best fit, reducing the need for bracketing and lowering return rates. User reviews and past purchase data further refine these recommendations, building shopper confidence and minimizing costly trial-and-error purchases.
Returns optimization doesn’t end at the point of return. AI and real-time data can be used to dynamically route returned items to the optimal location—whether that’s a local store, a regional warehouse, or directly to another customer. By printing shipping labels that direct returns to the most efficient distribution point, retailers can reduce transportation costs, speed up restocking, and maximize the resale value of returned goods. This approach also supports sustainability goals by minimizing unnecessary shipping and packaging waste.
Not all returns are created equal. By analyzing returns history and customer profiles, retailers can identify shoppers with a high likelihood of returning items and tailor their policies accordingly. For example, high-frequency returners can be incentivized to use lower-cost return channels, such as in-store drop-off or click-and-collect locations. Dynamic pricing on shipping or restocking fees can further nudge customer behavior, while quick-return incentives for seasonal items help maximize resale opportunities.
Returns present a unique opportunity to engage customers and drive incremental value—if managed thoughtfully. Retailers are reimagining the in-store returns experience with digital tools and personalized engagement:
While customer experience is paramount, operational efficiency is essential to mitigating the cost of returns. Modern retailers are investing in:
Returns optimization is no longer just about reducing costs—it’s about creating a seamless, customer-centric experience that drives loyalty and operational excellence. By leveraging data, AI, and digital tools, retailers can:
Retailers who embrace these strategies will not only protect their margins but also differentiate themselves in a crowded market. In the omnichannel era, returns are not just a cost center—they are a critical opportunity to build trust, deepen relationships, and unlock new sources of value.
Ready to transform your returns strategy? Connect with Publicis Sapient’s retail experts to unlock actionable insights and drive measurable impact across your omnichannel business.