RetailNext publishes a monthly report on the state of retail store traffic, aggregating trends across a wide base of customers who track how many people come to their stores. One of the best parts of the analysis is that they are able to tie traffic to intent to some degree – so they can offer trends related to average transaction value or returns traffic. To protect the proprietary data of their customers, they don’t offer absolute values, but they do show year-over-year comparisons, so you can make statements like “there was a 0.0% change in year-over-year returns traffic in April”. But you can’t say that returns contributed to X% of overall traffic during the month.
The company offers a view into the rolling past six months. So a report covering June (the latest available) reaches back to comparisons made in December and January. Return traffic year-over-year changes are pretty small in absolute terms – declining 0.1% in February up to the biggest uptick of 0.4% positive growth in returns-driven traffic in January. In the context of holiday spending and its aftermath, hardly a surprise.
What struck me about these numbers, though, is that during a time when almost every retailer is adding or expanding omnichannel options for fulfillment in stores, returns traffic seems to be barely budging year-over-year. There are lots of ways to justify offering things like click & collect, ship from store, or return to store (buy online but return to store), but an important one is the increased number of incremental trips that a retailer gets by offering a convenience that gets customers into the store, like returning online purchases to the store.
But looking at these year-over-year trends, it does not look like return traffic is going to be enough to bring store traffic – or, even more important, sales per square foot – back to the glory days of 2006. Whether it drives traffic or not, enabling return-to-store has its payoff for retailers who have the processes in place to handle it. Yes, there are incremental trips that bring customers to stores when they might not otherwise have gone. But the real value of a return is the opportunity to sell an exchange or even upsell into incremental revenue, not to mention put an in-person, customer service face on what might start out as a disgruntled customer experience.
But does it drive traffic? RetailNext doesn’t make the absolute values available, but when you take the trend of more stores offering a return-to-store capability alongside a pretty flat growth in return traffic, it’s hard to come to a conclusion that says that offering the service drives traffic – certainly not enough to offset the declining traffic that stores have been experiencing over the last decade.
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Now, there are lots of caveats to that statement. What if, among RetailNext’s customer base there is was no real increase in the number of stores offering return to store? Yes, that’s a possibility. But even retailers who already have the capability haven’t necessarily rolled it out to all their stores. Just announcing that…