Growth of E-commerce Sector Drives Returns Management Software Market Growth

The surge in global e-commerce during the COVID-19 pandemic initially emerged as a response to the necessity of the situation. With the closure of physical retail stores, online shopping became a practical alternative as people were forced to stay indoors. According to Morgan Stanley, the share of global retail sales attributed to e-commerce increased from 15% in 2019 to 21% in 2021. It is further estimated that e-commerce accounts for ~22% of total sales presently. The rise in e-commerce sales has surged the demand for industry services as consumers return upto 30% of the products in certain categories. This highlights the importance of effective return management processes and the need for businesses to address customer returns efficiently.

Returns management software plays a crucial role in supporting the expanding e-commerce sector. The increasing online sales volumes eventually surge the number of product returns. Efficiently managing these returns is crucial for businesses to reduce costs, enhance operational efficiency, and maintain customer satisfaction.

Implementation of returns management software enables real-time tracking and monitoring of returns, allowing businesses to have complete visibility into the process. Additionally, returns management software optimizes inventory management by providing insights into product quality, return patterns, and customer feedback. This information aids businesses to make informed decisions regarding product improvements, supplier relationships, and customer service enhancements. Thus, the growing e-commerce sector drives the returns management software market growth.

Returns Management Software Market: Industry Overview

The returns management software market is segmented on the basis of component, deployment, enterprise size, and geography. Based on component, the market is bifurcated into software and services. In terms of deployment, the market is divided into on-premise and cloud. Based on enterprise size, the returns management software market is bifurcated into large enterprises and SMEs. Geographically, the returns management software market is segmented into North America (the US, Canada, and Mexico), Europe (Spain, the UK, Germany, France, Italy, and the Rest of Europe), Asia Pacific (South Korea, China, India, Japan, Australia, and the Rest of Asia Pacific), Middle East & Africa (South Africa, Saudi Arabia, the UAE, and the Rest of Middle East & Africa), and South & Central America (Brazil, Argentina, and the Rest of South & Central America).

Based on enterprise size, the returns management software market is bifurcated into large enterprises and small & medium enterprises. The large enterprises segment held the largest returns management software market share. Returns management is a critical function for large enterprises, as it directly impacts customer satisfaction, operational efficiency, and bottom-line profitability. To effectively handle the complexities of returns on a large scale, enterprises require robust returns management software tailored to their unique needs. Returns management software designed specifically for large enterprises offers a wide range of features and functionalities to streamline the returns process. This software enables enterprises to handle high volumes of returns efficiently, automate workflows, and enhance visibility throughout the entire return lifecycle.

The report includes growth prospects owing to the current returns management software market trends and their foreseeable impact during the forecast period. The market in Europe is segmented into Germany, France, Italy, the UK, Russia, and the Rest of Europe. In terms of revenue, the UK dominated the Europe returns management software market share. The trend of increasing returns in the e-commerce sector continues to gain momentum as both consumers and retailers emphasize the importance of convenient and frictionless shopping experiences. Customers now have high expectations for hassle-free and cost-effective return processes, which has surged the demand for seamless and low-cost return options. Simultaneously, e-commerce businesses are facing the challenge of optimizing their returns management processes and minimizing the financial impact of returns. For instance, according to Whistl, a postal delivery company, in December 2023, the UK was a significant market with a high rate of return incidents, as 71% of online shoppers in the country regularly return items. The fashion sector significantly drives the return rates in the e-commerce industry. Among UK consumers, clothing items account for 27% of returns, followed by shoes at 15%, and bags and accessories at 14%. Managing returns in the e-commerce space presents distinct challenges compared to traditional in-store retail, leading to more demand for returns management software in the country. Additionally, as per the law in the UK and EU, retailers are legally obliged to accept returned products within 14 days of receipt without specifying any reasons.

Returns Management Software Market: Competitive Landscape and Key Developments

parcelLab; ReturnLogic; nShift; United Parcel Service of America, Inc.; Loop Returns; Return Rabbit; SAP SE; Shipcloud GmbH; and AfterShip are among the key players profiled in the returns management software market report. Several other major market players were also studied and analyzed during this market research study to get a holistic view of the market and its ecosystem. The returns management software market forecast provides detailed market insights, which help the key players strategize their growth. As per company press releases, a few developments are mentioned below:

• In January 2024, ReturnLogic, one of the leading providers of e-commerce infrastructure Software as a Service (SaaS), announced its integration with an open SaaS e-commerce platform, BigCommerce. This collaboration introduced a new era of intelligent, data-driven returns management for serious e-commerce brands.

• In August 2023, parcelLab, the premier global provider of post-purchase customer experience software, announced the launch of Retain. The new product offers consumers a seamless returns experience while providing brands with flexibility and customization options to reduce costs and increase revenue.