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The hangover of post-Christmas gift returns has exposed core reverse logistics challenges for UK brands over the coming months. With holiday decorations taken down and “Returnuary” over, this year’s piles of unwanted goods amounted to £1.05 billion, according to Manhattan Associates research.
Today’s brands now not only have to manage a multi-channel reverse supply chain, but also deal with maintaining customer trust and trying to improve efficiency across their operations.
Fashion’s growing footwear crisis
The fashion sector faces particularly significant challenges as a result of returns. With London Fashion Week coming up, each year it sparks continued conversation about circularity. As designers ready their new collections, many will be keen to understand how the creators’ innovations will set the tone for wider industry change for a more circular future. After all, Manhattan Associates’ research shows that fashion sits at the centre of the returns crisis, with clothing (39%) and footwear (37%) topping the list of most-returned gifts over the holidays. For footwear, this was a significant surge, nearly doubling from 21% last year.
Clothing brands have to contend with sizing, gift purchases, and the rise in people wanting the at-home comforts of “try before you buy”. As such, the sector faces a long list of operational challenges as it attempts to give consumers convenience, whilst also prioritising sustainability and profitability.
The trust paradox
Consumers now have a mix of human interactions and virtual experiences when they shop, with retailers continuing to automate a rising number of processes in-store and online. However, Manhattan data reveals a striking preference: most (81%) UK shoppers prefer dealing with a real person for returns over a digital assistant, with 70% citing trust as their primary reason.
Retailers are facing a paradox where they understand customers want the speed and efficiency of automation, but they also crave the personalisation and trust of human interactions.” He continues, saying “The key is building AI confidence with customers through each communication and outcome – injecting personalisation into the returns process while combining technology with the empathy, flexibility, and problem-solving humans naturally bring.
– Martin Lockwood, Senior Director, Manhattan Associates
Leading retailers will be those that can blend both approaches, maintaining the human touch at the customer interface.
The generational divide and omnichannel chaos
The returns challenge is further complicated by the divide in how different generations shop – highlighted by the fact that while over half (53%) of 18-24-year-olds returned at least one gift in December, 87% of over-65s said they returned nothing at all. This data is indicative of vastly different shopping preferences and relationships with brands’ discovery commerce models. For young shoppers, frictionless returns are simply part of the expected shopping experience – it’s all they have known. Whereas older shoppers seem to look at it as a last resort, with decades of requiring in-person experiences and receipts.
Changing shopping habits for young people has been driven by platforms like TikTok Shop, where brands such as Lidl, Marks & Spencer, and even Gucci are selling directly to audiences. Manhattan research confirms that those aged over 65 were more than twice as likely to plan to do all their shopping in person at the end of last year (23%), compared to just 10% of those aged 18-24. On TikTok Shop, every purchase is part of a public story, making customers’ positive and negative returns experiences equally visible. And, because it’s so transparent, there is little opportunity to recover quietly.
Lockwood adds: “Social commerce turns every viral moment – and every return – into a test of supply chain performance. The generational divide between Gen Z and Boomers only amplifies this challenge. Retailers need to match the speed of digital engagement with the speed of physical delivery, while managing returns seamlessly across every channel. As social commerce rises, fulfilment failures will be marketing failures.”
Learning from “Returnuary”
It’s not just the Christmas period that drives returns challenges – they crop up at all gift-giving seasons. So, with Valentine’s Day in a couple of weeks and Mother’s Day approaching in March, retailers have an immediate opportunity to apply these lessons. Without strengthening their return models and capabilities, retailers’ generosity is bound to reach its limits. But the solution isn’t to reactively retract convenience or create restrictive policies that alienate customers – it’s about implementing smarter technology, and better processes. That is all possible. The question is just whether retailers have the will and technology platforms and change management processes necessary to implement it before next “Returnuary” arrives.
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