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Returns in online clothing sales: effects and solutions

23 October 2019

by Isabelle Ohnemus

Returns in online clothing sales: effects and solutions

The App Annie ’s Retrospective indicated that 31% of all sales are made via the mobile phone. This shows how fast the world of online shopping is developing. Although e-commerce and m-commerce are becoming increasingly important to improve a brand’s sales performance, retailers are still facing a daunting global challenge – the epidemic of returns.

Confusion with clothes sizes

Sizing is a major challenge for the global fashion industry. Consumers are often dissatisfied with unsuitable orders. According to the Financial Times (“Clear Returns”, 2016), the fashion industry is at the top of the consumer goods industry for online returns. In addition, the Financial Times reported that UK retailers have taken unbelievable £60bn from postal returns, of which a third are directly attributable to online shopping. A common trend emerged: millions of customers bought multiple items in different sizes and returned those that did not fit.

The Barclaycard study commented on the phenomenon “series returns” and reported that the management of returns had a negative impact on the fashion business: one in five retailers admitted that they had raised their prices to cover the return costs. The report states that customers feel safer when they buy multiple sizes and then return the ones that don’t fit. The report also mentions that shoppers wanted size standardization and that retailers should offer smart technologies to better visualize the online shopping of clothing.

BBC News reported that 63% of consumers have returned online clothing purchases, again pointing to the lack of a global standard for the fashion industry.

This infographic visualises the non-existence of a sizing standard, with brands having their own size charts. A size 10 for women means something different for four well-known high street brands.

This discrepancy in the measurements creates different size charts, making customers confused when purchasing online. Shoppers often get disappointed with their fashion deliveries, resulting in them feeling frustrated and less confident when buying fashion online. Retailers see the negative effects on profit margins, in terms of returns and customer loyalty.

The infographic also shows how customers experience the stress of finding optimum sizes, reflected in the high number of returned clothes purchased online. The rising percentage of sales made online and the consequent rate of returns makes it clear that retailers need to deliver a higher quality shopping experience that mirrors the one they get in-store. The industry needs a seamless solution that focuses on personalisation and on smart data to create an improved relationship between brands and consumers.

Since body shapes and sizes are so different, one could argue that it is impossible to create a global standard anyway. However, this does not solve the problem of frustration and lack of trust that is now associated with shopping for clothes.

Rising returns rates also have another important dimension that many unintentionally turn a blind eye to. The carbon footprint of a brand is now more in focus. The higher the number of returns, the higher the carbon footprint for transport and processing.

The growing percentage of online sales and the resulting returns make it clear that retailers need to provide a higher value shopping experience. The industry needs a seamless solution that focuses on personalization and smart data to create a better relationship between brands and consumers.

Lower returns rate

As more brands become aware of their impact on the environment and the circular Fashion industry becomes reality, garment manufacturers have to change at many levels. The first step should be to admit that sizing is a problem that seems to be the trend for brands. With free shipping, the best way to get fewer returns is to make sure a consumer buys the right size the first time they shop. As technology plays a role in problem solving, many companies are using unique approaches and technologies to find sizing solutions that are suitable for both the frustrated consumer and the retailer.

The worlds of fashion and technology need to work more closely together. In this way, the fashion industry will begin to find real, holistic solutions to solve the global problem of dress sizes and to invest in digital solutions, e.g. in personalization tools that are supported by machine learning and big data. It is a partnership between brand, manufacturer and sizing solution. With the right technology and approach, the way you shop today can change. Personalization is slowly but surely evolving from a buzzword to a number of effective ways of turning customers from traditional customer service to smart data usage. The sizing technology is an efficient method for selling and removing dead stock.

Brands need to be able to better understand and communicate their own sizes (from garment manufacturing to online sales), and then, together with a personalized size-determining solution, to provide the consumer with the best possible shopping experience.

Lowering the return rate leads to higher net sales, lower fulfillment costs and higher customer satisfaction. This, in turn, has a very positive effect on the average cart size and the shopping frequency of the customers.

In a world where online shopping is only increasing, we must all be more diligent. Lowering the returns rate is only part of the solution, but all brands and retailers should focus on it.