Retailers Drunk on Black Friday and Cyber Monday Wake Up Hung Over on Boomerang Thursday

by Nico Scopelliti

Retailers these days must be really strung out. We're talking beaten, bloodied, exhausted, and hung over—and there isn’t a bottle of aspirin in sight. The competition is ruthless, margins are shrinking, and customers are demanding ever greater levels of service and convenience.

Thank goodness for the holiday season, right? One day the whole of America is giving thanks for the year’s blessings, and the very next day we are fighting—literally fighting, as in throwing punches—with each other over loss leaders like HDTVs and video game consoles. Then it’s four weeks of unabashed consumerism right up until that wonderful, wonderful day: Christmas. At one point it had something to do with some dude born in Palestine a couple millennia ago, but that’s old news. Today it’s all about the cheap tablets and gift cards, baby!
But just as soon as they go profitable for the year and are reveling in their hard-earned success, “Boomerang Thursday” hits. It’s the worst day of every retailer’s year. The day all those Christmas presents come back, and up to 10 percent of their revenue goes down the drain.

For some reason this author hasn’t been able to divine, the first Thursday after Christmas is the day most people return unwanted or ill-fitting gifts, even if it’s New Year’s Day. LCP Consulting, a logistics firm based north of London, estimates £600 million worth of them will be returned post-Christmas in the UK. In the US, it’s $60 billion—with a B—says Maryland-based reverse logistics specialists Optoro.

Boomerang Thursday is a depressing day in the life of the world’s malls and plazas, but it’s worse for e-commerce sites. While five to ten percent of items purchased at brick-and-mortar stores are begrudgingly carted back, it’s upwards of 10–15 percent for online stores. And God help you if you sell apparel; that can be as much as 50 percent.

While I feel their pain, I’d be lying if I didn’t admit to grinning and rubbing my hands together at what I see is for us Practitioners, a glorious opportunity. Wherever there is pain, there are profits to be made. Wherever a company’s supply chain is weakest, the least optimized, or causing the most grief, the more hidden operating cash flow there is to be uncovered. Small percentages of improvement yield huge savings when you’re dealing with millions of dollars.

The bigger the headache, the bigger the pill. Well, they can go ahead and call supply chain experts like you and me the Big Pill. Go get 'em, boys!

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