Tim Moylan, Chief Growth Officer at Infios, explains how post-Christmas returns are redefining reverse logistics as a strategic supply chain capability.
Entering the new year, supply chains are operating in a different but equally demanding phase of peak activity. January and early February have become critical months for retailers and logistics providers, as networks pivot from outbound fulfilment to handling a surge in returns at speed and scale. While parcel volumes fall from December highs, operational complexity remains elevated as reverse flows move through the system.
Post-Christmas returns present a fundamentally different challenge to outbound fulfilment. Unwanted gifts, impulse purchases and incorrect orders re-enter distribution networks unevenly, in varying condition and often with limited visibility. This variability makes inspection, decision-making and inventory reintegration significantly more complex, placing sustained pressure on distribution centres, carrier networks and customer service teams.
This operational shift is occurring alongside strong market growth. Analysis from IMARC Group shows the Australian reverse logistics market reached $21.5 billion in 2025 and is projected to grow to $32.4 billion by 2034, representing a compound annual growth rate of 4.66 percent from 2026 onward. Return rates spike most sharply in fashion, consumer electronics, toys, cosmetics and homewares – categories that dominate online sales in the lead-up to Christmas. Research from Monash Business School’s Australian Consumer and Retail Studies found that 28 percent of Australian consumers have returned a Christmas gift at some point, highlighting the scale and persistence of the challenge.
At the same time, retailers are navigating increasing tension between customer expectations and operational realities. Shippit’s State of Shipping 2025 report found that only 14 percent of Australian retailers offered free returns in 2025, down from 49 percent in 2018. While consumers continue to expect returns to be fast, transparent and frictionless, the cost and complexity of delivering that experience has grown.
To manage this, advanced analytics and artificial intelligence – technologies already widely used to plan for Black Friday and Christmas demand – are increasingly being applied to reverse logistics. Predictive models help organisations anticipate return volumes by product type and geography, supporting more accurate planning for labour, space and transport. Intelligent decision engines can also determine, in near real time, whether returned items should be restocked, refurbished, redirected to secondary channels or written off, a critical capability in a margin-sensitive post-Christmas environment.
Visibility is equally important. Australian consumers expect transparency throughout the returns journey, particularly when refunds are delayed during a period of heightened cost-of-living pressure. IoT-enabled tracking and event-based monitoring provide real-time insight into the location, status and condition of returned goods, helping retailers maintain trust while reducing operational friction.
The impact of returns season is felt most acutely within Australian distribution centres. Facilities designed to maximise outbound efficiency must rapidly adapt to inspection, sorting and reintegration workflows, often within tight space constraints. Labour shortages, sustainability expectations and pressure to reduce waste and unnecessary transport miles add further complexity. In response, many operators are deploying voice-directed workflows, automated sortation and autonomous mobile robots as part of broader warehouse management strategies. When integrated with a warehouse management system, these intelligent supply chain execution technologies help standardise returns handling, improve productivity and scale operations during peak reverse-logistics periods.
From Infios’s perspective, the post-Christmas period highlights a critical capability gap in Australian supply chain execution. Returns are no longer a secondary process or an unavoidable cost to be minimised in isolation. They are a strategic capability that directly influences profitability, sustainability performance and customer loyalty. Intelligent supply chain execution platforms that unify warehouse, transport, inventory and analytics functions enable organisations to manage reverse flows proactively, rather than responding once products have already re-entered the network.
The weeks following Christmas underscore a broader shift in how logistics performance is judged. Success is no longer measured solely by how quickly orders are delivered in December, but by how intelligently value is recovered in January – through visibility, speed of decision-making and a seamless customer experience. As return volumes continue to rise year on year, mastery of reverse logistics is becoming a defining competitive advantage for Australia’s retail and logistics sector.
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