Returns have long been a thorn in the side of retailers, representing a trillion-dollar challenge that erodes margins, strains supply chains, and threatens customer loyalty. Yet, as the retail landscape evolves—driven by the rise of e-commerce, omnichannel expectations, and digital innovation—returns management is emerging as a powerful lever for differentiation and growth. The future belongs to retailers who can transform returns from a cost center into a source of competitive advantage.
The surge in online shopping has brought convenience to consumers but also a dramatic increase in return rates, especially in categories like apparel and footwear. Research shows that nearly half of consumers look for an easy way to manage returns when choosing online retailers, and in some segments, return rates can reach 40-50%. The cost of processing, restocking, and reselling returned goods—combined with the risk of lost sales and customer dissatisfaction—makes returns a critical issue for profitability and brand reputation.
Yet, the returns process is also a pivotal moment in the customer journey. A seamless, transparent, and customer-centric returns experience can drive repeat business, foster loyalty, and even create new revenue streams. Conversely, a cumbersome or costly process can drive customers away for good.
Pandora, the world’s largest jewelry brand, offers a compelling example of how to reimagine returns as part of a broader digital and operational transformation. Facing fragmented e-commerce operations and limited visibility into logistics and customer service, Pandora partnered with Publicis Sapient to build a unified commerce platform, break down silos, and put the customer at the center of every touchpoint.
Key to Pandora’s success was the integration of digital and physical channels, enabling customers to move fluidly between online and in-store experiences. Over 80% of Pandora’s transactional journeys now start online, but 80% are completed in a store—underscoring the importance of seamless omnichannel journeys, including buy-online-return-in-store (BORIS) and click-and-collect. By modernizing order management, consolidating data, and empowering store associates with real-time insights, Pandora not only improved the returns process but also enhanced customer satisfaction and operational efficiency.
Retailers seeking to turn returns into a competitive advantage should consider a holistic, data-driven approach that spans the entire value chain. Here are practical frameworks and strategies:
Digital tools are transforming the returns landscape. AI-powered recommendation engines help customers find the right products the first time, while virtual try-on and augmented reality reduce uncertainty in categories like fashion and home goods. Customer data platforms (CDPs) aggregate and analyze returns data across channels, enabling real-time personalization and smarter decision-making.
Automation and robotics in warehouses, as seen in leading fashion retailers, accelerate returns processing and improve accuracy. Integration with supply chain partners and dynamic routing further reduce costs and environmental impact.
The future of returns is not just about minimizing costs—it’s about maximizing value. Retailers who invest in digital tools, data-driven processes, and customer-centric experiences can turn returns into a strategic asset. This means not only reducing return rates and operational costs, but also driving loyalty, increasing lifetime value, and unlocking new revenue streams through personalization and platform innovation.
At Publicis Sapient, we help retailers reimagine the returns journey—integrating strategy, technology, and experience to deliver outcomes that matter. The next era of retail will be defined by those who see returns not as a problem to be managed, but as an opportunity to lead.