Retail Reduced – January 2025

‘Serial returners’ are in the spotlight as we head into the year of the snake; 2025. A joint report by the return logistics company ‘ZigZag’ and the research company ‘Retail Economics’ highlighted that despite serial returners accounting for only 11% of shoppers, they are predicted to account for almost a quarter of the £27 billion returns in 2024. The same report concluded that a fifth of non-food purchases made online in the UK are now returned. The motive behind these serial returners range from, ‘bracketing’, the practice of ordering a number of different colours and sizes, ‘wardrobing’, ordering different outfits to wear out with the price-tag hidden to then return the item and ‘staging’, the ritual of ordering clothes to take photos in and flaunt on social media, and then return. Despite returns appearing harmless to the consumer, for the retailer these trends are becoming toxic and very costly.

2025 is set to be the year where retailers will attempt to claw back some of the detrimental costs linked to consumer returns, whilst simultaneously not driving customers away. The balance between ‘seamless customer-pleasing efficiency’ and logistical nuisances is a fine line to tread, but some of the following examples have proven beneficial to some, and therefore may be worth trialling:

Targeted returns management with customer profiling

AI can be used to identify individual shoppers with higher rates of return and track those accounts that have been linked to the challenges associated with fraud. Analysing purchasing and return behaviour, has helped retailers keep a close eye on specific accounts without penalising all shoppers under one broad sweeping brush. By taking ‘tailored actions’, retailers can limit returns for serial returners and offer alternative exchange incentives instead of full refunds. By adopting a policy that isn’t ‘one-size fits all’, retailers can have the upper hand by offering convenient return options to the majority of consumers, whilst protecting themselves from the financial burden of excessive or fraudulent returns.

Use of data analytics

Returns management is crucial to minimise the financial burden and ‘logistical headache’ for retailers. By analysing data streams, retailers can forecast return rates, identify which items are being returned at a higher rate and thus, anticipate issues before they snowball into a greater problem. By working out which clothing is ‘true to size’, or ‘tighter’ or showing measurements of the model wearing the clothes, consumers can feel more confident with their purchases and refrain from over-ordering.

Merging return shipments

For Asendia, an international e-commerce and mail delivery solutions company, their new ‘e-PAQ Returns service’, provides end-to-end guidance and monitoring of return processes. Asendia, have explained that ‘consolidating returns reduces transportation costs by combining shipments into fewer, fuller truckloads or air freight return batches’, which accordingly reduces the economic burden on retailers. This combined with apps to provide the efficiency of returns, can allow consumers and retailers alike to track returns and plan ahead.

The Levelling-up and Regeneration Act came into force in October 2023, with bold mechanisms to allow local authorities to auction privately owned, ‘persistently’ vacant, high-street premises. The Local Authorities (Rental Auctions) (England) and Town and Country Planning (General Permitted Development) (Amendment) Regulations (the Regulations), have recently been published and came into effect on the 2 December 2024. These Regulations add depth and understanding to the process behind the high street rental auction. Obligations fall on both the local authority and the landlords, to ensure that a targeted property can be safely and successfully exchanged by the end of the timetable of up to 24 weeks (subject to extension).

One in seven high street shops are currently closed, so the High Street Rental Auction Scheme (HSRA) could provide a crucial boost of life for abandoned town centres and increase the number of people within walking distance of local shops. However, the question remains as to whether we are actually living in an age full of idle landlords, who require state intervention. Also, despite the government committing ‘over £1million’ to support this scheme, with the abundance of local authorities in England (317 to be exact), the proportionate financial allocation is limited.

For retailers concerned about the pre-conditions for kickstarting the HSRA process, the regulations only apply to a ‘qualifying high-street premises’ situated on a ‘designated high street‘ or in a ‘designated town centre‘. Once this has been established, the following two conditions must be met:

1. Vacancy Condition: the property has been unoccupied for a whole year or was unoccupied on at least 366 days during the preceding two-years.
2. Local Benefit Condition: the local authority considers that the occupation of the property for a suitable high-street use would be beneficial to the local economy, society or environment.

To facilitate the HSRA process, the Regulations have also amended Planning procedures. A new temporary permitted development right has been created, which allows the change of use for a ‘qualifying high-street premises’ to a ‘suitable high-street use’ (Class DB). This will only apply for the duration of the HSRA tenancy. We will be watching this space vigilantly, to assess whether the HSRA will become a popular tool for local authorities, or whether it will merely work as motivation for landlords to seek out occupiers in a bid to retain control.

For more detailed information on the step-by-step process behind the HSRA, please do read our recently published article ‘Fair Warning’ for the High Street.

The retail space has witnessed a dramatic shift in shopping trends as consumers embrace sustainability. This growing movement – led by a mix of eco-conscious Millennials, Gen Z and a surprising cohort of older shoppers – is reshaping how businesses operate.

Sustainability is no longer just a buzzword – it’s a buying criterion. A 2024 Deloitte report found that one in four consumers are willing to pay more for brands that demonstrate commitment to environmentally sustainable and ethical practices. Such practices can range from adopting eco-friendly packaging, reducing the brand’s carbon footprint and ensuring suppliers have a history of compliance with green regulations.

The demand for sustainability spans across industries. From food and drink to fashion and tech, consumers want transparency about how products are made, shipped, and disposed of. In particular, brands are facing increased scrutiny for details about ethical sourcing and fair labour practices. While brands have taken note of this and increased messaging surrounding sustainability, retailers must ensure communications accurately reflect their brand’s contributions to the green sector. A KPMG survey discovered that 54% of consumers stated misleading sustainability claims would be sufficient reason for them to stop buying from a business. Transparency is not just a preference – it is a prerequisite for trust and loyalty.

The so ‘called circular’ economy is one of many standout trends in conscious consumerism with second-hand marketplaces leading the charge. Platforms like Vinted and Depop have brought second-hand shopping into the mainstream as consumers opt to buy ‘pre-loved’ goods over brand new options. Although the circular economy has been experiencing somewhat of a boom lately, it is not an entirely new phenomenon – major retailers have been offering in-store clothes recycling for unwanted apparel for some time now, with H&M’s Garment Collecting programme running since 2013.

The conscious consumer is here to stay. As shoppers continue to demand more sustainable and ethical choices, retailers must innovate to meet these expectations. The future of retail is green, transparent and driven by consumers who care about more than just price.

Major retailers including Uniqlo, Gymshark and Lush have come under scrutiny for using gig economy apps for staffing. Gig economy apps such as YoungOnes and Temper have been favoured for the ease of arranging staffing for busy periods, such as the Christmas season. However, these apps have received criticism for the lack of employment protection offered to workers. The Trades Union Congress has been particularly vocal, sending a letter to retailers stating “we urge you to end this practice immediately and ensure that all your workers receive the rights and protections that they deserve as directly employed or agency workers“.

One main point of contention comes down to workers on such apps counting as self-employed. A possible result of this is that benefits including the legal minimum wage and the provision of break times may not be available to workers attaining shifts through gig economy apps. Kate Bell of the Trades Union Congress elaborated further “anyone looking at this arrangement from outside would consider it laughable that the person serving them was a self-employed worker akin to a visiting tradesman, rather than the permanent or temporary worker for your business“.

Feeling the heat, retailers disavowed gig economy apps and issued statements about their recruitment processes for staffing. Uniqlo, which confirmed using the gig economy app Temper to bring in extra workers to support its existing staff, put using it down to “a brief trial period” and stated it will no longer source freelance workers for temporary positions in its stores. Among retailers responding to concerns surrounding sourcing freelance workers from gig economy apps was the beauty company Lush, who clarified they have no further plans to hire freelance workers through gig economy apps in the future.

Fury surrounding the use of gig economy apps comes down to the imbalance between the worker and the employer, with the worker potentially losing out on key protections afforded to agency workers recruited for similar retail roles. Employers should be weary of non-standard recruitment arrangements that offer minimal protection to workers.