Back in 2020, during lockdown, consumer spending was unflagging, and few products were being restocked on store shelves because people were rushing to obtain supplies. Since then, things have changed; rather than shortages, companies are facing excess production.
Mountains ranges of sad, abandoned supplies sit upon warehouse floors, which are nearly the size of two football fields. Items such as patio furniture, garden hoses, nonstick pans, and Barbie Dreamhouses are present in the piles, available at massive discounts.
Today, more items are being returned than ever. With a surplus of unwanted supplies, retail companies are struggling. If they are unable to resell their items, even discounted ones, they will have to deal with an overstuffed inventory, which disables their ability to restock their shelves with new items. Over the past year, more than $761 billion were lost in returned sales.
This massive increase in returns may have been due to an increase in online shopping during the pandemic; seeing a virtual item can be more misleading than seeing it in person.
According to the National Retail Federation and Appriss Retail, shoppers returned about 16.6% of their purchases in 2021, which was more than double the amount in 2019.
Customers are also purchasing less due to inflation. Although persistent consumer spending occurred during the pandemic, with demand surpassing supply, the desire for products is fizzling. It was always evident that the demand will decrease eventually and store owners will have to pull back, but it turns out that they pulled back too late.
“It is surprising to me on some level that we saw all that surge of buying activity and we weren’t collectively able to see that it was going to end at some point,” said J.D. Daunt, chief commercial officer at Liquidity Services.
Liquidity Services, founded back in 1999, is one of the many companies that collect returned items for resale. Retail stores such as Target or Walmart rely on companies like these so they can clear their shelves.
Residents are finding eco-friendly ways to dispose of the excess products in warehouses. Some are donating them to their neighbors, while others are organizing bids.
More workers are being hired to help out in warehouses. Otherwise, the abandoned items will end up in landfills or in the incinerator.
It’s the “dark side of retail,” according to Tony Sciarrotta, executive director of the Reverse Logistics Association.
Mountains ranges of sad, abandoned supplies sit upon warehouse floors, which are nearly the size of two football fields. Items such as patio furniture, garden hoses, nonstick pans, and Barbie Dreamhouses are present in the piles, available at massive discounts.
Today, more items are being returned than ever. With a surplus of unwanted supplies, retail companies are struggling. If they are unable to resell their items, even discounted ones, they will have to deal with an overstuffed inventory, which disables their ability to restock their shelves with new items. Over the past year, more than $761 billion were lost in returned sales.
This massive increase in returns may have been due to an increase in online shopping during the pandemic; seeing a virtual item can be more misleading than seeing it in person.
According to the National Retail Federation and Appriss Retail, shoppers returned about 16.6% of their purchases in 2021, which was more than double the amount in 2019.
Customers are also purchasing less due to inflation. Although persistent consumer spending occurred during the pandemic, with demand surpassing supply, the desire for products is fizzling. It was always evident that the demand will decrease eventually and store owners will have to pull back, but it turns out that they pulled back too late.
“It is surprising to me on some level that we saw all that surge of buying activity and we weren’t collectively able to see that it was going to end at some point,” said J.D. Daunt, chief commercial officer at Liquidity Services.
Liquidity Services, founded back in 1999, is one of the many companies that collect returned items for resale. Retail stores such as Target or Walmart rely on companies like these so they can clear their shelves.
Residents are finding eco-friendly ways to dispose of the excess products in warehouses. Some are donating them to their neighbors, while others are organizing bids.
More workers are being hired to help out in warehouses. Otherwise, the abandoned items will end up in landfills or in the incinerator.
It’s the “dark side of retail,” according to Tony Sciarrotta, executive director of the Reverse Logistics Association.
