According to Savills’ latest Impacts study, global e-commerce sales are expected to reach $4.8 trillion in 2025, with $1 trillion worth of goods expected to be returned.
Managing returns remains one of the most persistent and costly challenges in e-commerce. Companies around the world are working to meet the demands of returns logistics. As online sales continue to rise and the industry continues to grow, so does the pressure on supply chains and real estate strategies to efficiently and competitively handle complex, high-volume returns.
A recent survey by DHL shows that 53% of respondents named “free returns” as the second most common request in e-commerce – just behind “free shipping”. At the same time, 39% cited return shipping costs as the biggest frustration factor when buying online. If retailers want to continue to charge return fees and still retain their customers, they must focus above all on speed and convenience.
While the introduction of return shipping fees will reduce the volume of returns, companies must be prepared to integrate large quantities of returned goods into their inventories. According to Savills, since returns logistics require around 20% more storage space than traditional goods shipping, well thought-out real estate strategies remain a key success factor.
E-commerce is characterized by long supply chains and complex logistics structures – but it is above all local logistics centers that are coming under particularly strong pressure under the high volume of returns. According to Savills, this surge in demand has contributed to a 30% global increase in prime rents and levies on warehouse space since December 2020.
To efficiently handle returns for customers worldwide, e-commerce companies need to secure and operate warehouse space in strategically located markets – especially near major metropolitan areas and transport hubs. Proximity is crucial to minimize shipping times and costs, which has driven up the value of well-located logistics properties.
Connor Chilton, analyst at Savills World Research, explains: “With the continued growth and establishment of e-commerce, as well as the ever-increasing expectations of online customers, returns management remains a key factor in shaping real estate and supply chain strategies. Companies that adapt to the demands of returns logistics at an early stage, secure well-located and flexible storage space, and invest in technology and talent will be best placed to deliver a frictionless customer experience in an increasingly competitive market.”
