What’s Happening: The Revenue Realities Behind Record Vacation Spending
The holiday shopping season delivered exactly what retailers had hoped for. It was a packaged store, a fully digital shopping cart, and spending that exceeded expectations. Cyber Week, which lasts five days from Thanksgiving to Cyber Monday, saw consumer spending increase 7.7% year over year, with the number of Americans opening their wallets during the period increasing from 197 million to 202.9 million in 2023.
The emergence of more strategic shoppers
Today’s consumers are armed with deal alerts and price comparison apps, demonstrating a laser focus on value and deep discounts. This wasn’t the carefree, impulsive shopping of years past. The era of casual searches giving way to spontaneous purchases has given way to strategic, intentional buying behavior shaped by economic uncertainty and inflation fatigue.
Where shoppers actually spend
Channel shifts continue to transform the retail landscape. While 129.5 million shoppers visited physical stores, a 3% increase, the actual action took place online, driving sales to $79.6 billion, a 5% increase over last year. Online shopping now accounts for 30% of all holiday sales, a figure that confirms the pandemic’s continued impact on the way we shop.
Retailers have navigated this season adeptly, managing inventory shortages in response to an uncertain economy and unpredictable tariff environment. This strategy has paid off during a recent surge in sales, but it also sets the stage for the next step: the inevitable wave of returns that follows each holiday season.
$160 Billion Comes Back to Reality
Approximately 17% of carefully wrapped holiday gifts are returned to stores and distribution centers. Returns amount to approximately $160 billion, a staggering number that represents one of retail’s most challenging operational realities.
The returns landscape has fundamentally changed. The explosion of online shopping has led to return rates more than doubling since 2019. The overall return rate is only around 17%, but the story is different when it comes to online purchases. More than 19% are returned, with returns valued at $50 billion to $60 billion. For online clothing, the numbers have increased even further, with return rates approaching 30% as customers effectively use their own homes as fitting rooms.
Hidden Return Costs
The financial impact extends beyond simply restocking shelves. The cost of processing a return is typically about 30% of the item’s original price at the retailer, with lower-priced items accounting for a much larger portion of that value. These costs add up quickly, reducing the holiday profits the retailer just celebrated. And perhaps there are greater concerns about the long-term health of the business. With 71% of consumers saying they are unlikely to shop with a retailer again after a poor returns experience, the importance of managing returns and excess inventory goes far beyond simple operational efficiency.
Prepare for a Post-Holiday Surge
B-Stock, the largest B2B resale platform that handles returns and excess merchandise for 9 of the top 10 retailers, finds itself at the epicenter of this post-holiday tsunami. Our data speaks clearly. In the first quarter, we typically saw a 20-30% surge in inventory flowing through our platform, about 60% of which was comprised of customer returns, while other quarters saw a 40% increase due to excess inventory and shelf pools.
As retailers face increasing pressure to balance strong sales with sustainable operations, the ability to efficiently process, resell and recover the value of excess merchandise is not only operationally critical, but also strategically essential. The holiday shopping season may grab the headlines with record numbers, but the real work for retail operations teams is just beginning.
Are you ready to turn your post-holiday returns into revenue recovery? Download our annual Holiday Playbook to discover comprehensive data, actionable insights, and proven best practices to help retailers, brands, and OEMs maximize the value of returns and excess inventory. Get the strategies you need to navigate the busiest returns season of the year.
download now
