A trend for ordering clothing online in multiple sizes and returning items that do not fit has been identified by a leading industrial and logistics expert as contributing to the increased demand for warehouse space.
The impact of ‘serial returners’ has drawn criticism from retailers who have seen their profits slump, with six in 10 saying their business has suffered as a result of shoppers returning unwanted items.
However, Tim Davies, the Bristol-based head of the Industrial & Logistics team at Colliers International for Europe, the Middle East and Africa, has pointed out that the practice of over-ordering when shopping online and then returning items has also created issues in terms of the extra space required for returns.
“The increased use of the internet for shopping is resulting in significant demand from retailers for more warehouses to store the goods to be sold – or goods that have been returned. Return levels of goods ordered online in the UK are typically estimated at between 25 per cent and 40 per cent,” he said.
“Those warehouses will need to be larger than in the past, in order to house the automated racking, picking and sorting systems needed to meet the demands of e-commerce.”
In a recent survey for Barclaycard, one in five respondents said they order multiple versions of the same item so they can decide at home and then send back anything that doesn’t fit. Women are almost twice as likely to do this – some 23 per cent compared with 12 per cent of men.
Six in ten retailers said their businesses had suffered as a results of ‘serial returners’ who over-ordered and then sent back unwanted items. Online-only firms had been hit hardest, with three in ten saying managing returns had hit their profits.
The findings reflect those of a report Mr Davies was involved in producing called ‘From Sheds to Shelves’, which examined the rapid rate at which modern logistics and retail markets are developing and evolving in response to demand from British consumers, who are driving the highest demand for e-commerce in Europe with more than 15 per cent of retail sales now made online.
He said that the revolution taking place in the logistics and retail markets has already resulted in the construction of Britain’s first 1,000,000 sq ft warehouses – bigger than 25 football pitches laid end to end.
These include plans by The Range to build a 1.2 million sq ft distribution centre on a 55-acre site at Avonmouth; Hermes moving its parcel processing operations to a new 43,000 sq ft facility; and Lidl purchasing a 33-acre site on which to build a 600,000 sq ft distribution centre.
The common theme here has been size. The Range warehouse can be extended to 1.3 million sq ft – the equivalent of 15 Wembley stadiums.
Mr Davies said: “Only a few years ago, a 1,000,000 sq ft warehouse would have seemed excessive – now it’s acknowledged to be essential as retailers are responding to the changing shopping habits of modern consumers.
“Size matters in today’s market, and Avonmouth has space to cope with the biggest sheds. We believe the market is sufficiently buoyant to encourage and reward speculative development in Avonmouth, which will gain improved accessibility when a new M49 motorway junction is built in 2017.”
