Returns are very much in the spotlight at the moment, both for their impact on the environment and their impact on the bottom line for retailers and brands. And two new studies this week, offer up some interesting facts around the issue of returns.
And a key conclusion of both reports is that retailers need to get sizing right so consumers can choose items they know will fit, with data and tech being key here.
The British Fashion Council’s (BFC) Institute of Positive Fashion (IPF), has linked with courier giant DHL and consultancy Roland Berger to launch a new report on the environmental impact of returns in fashion, while also offering up recommendations to solve some of its problems.
It said the research “comes at a critical time, as the returns process in the UK generated 750,000 tonnes of CO₂ emissions in 2022 and some 23 million garments [were] sent to landfill or incinerated. This represents 75% of the approx 3% of all returns that cannot be resold”.
The study found that incorrect sizing or fit (93%) and product quality not meeting expectations (81%) were the top returns reasons, and that for more than half of shoppers, a returns charge is the measure most likely to prevent returns.
It added that to reduce the practical impact of returns and the fact that consumers might be unhappy with what they’ve bought, “the onus is on retailers to help consumers make the right choice, the first time, every time”.
The BFC thinks fashion businesses “need to be more thoughtful about the products they are selling so that they are producing collections customers will want to keep. They should also be enabling shoppers to buy correctly by leveraging data and digital solutions”.
It believes that investment in sizing calculators will become an industry norm and digital avatars an integral part of the future for fashion retailers.
In fact, Roland Berger has calculated that large retailers with approximately 70% of sales coming from their websites, “could reduce cost of returns handling by 20%-40% with the introduction of sizing calculators and avatars”.
The report also suggests that free returns will become a thing of the past, something already being seen as more and more companies introduce returns fees.
It seems that “using an environmental message to prevent consumers returning goods currently holds no sway; some 56% of online shoppers surveyed indicated a returns charge or levy as the measure most likely to prevent them returning goods. The trade-off could be losing customers – but as more companies adopt charges it will become an industry norm”.
But it’s not as simple as just applying a fee, as it’s clear that making returns difficult for people could be counter-productive in terms of business performance.
The report also said that it’s important for businesses themselves to be very efficient in the way they handle returns both for profitability reasons and to help the environment. “Retailers need to look closely at reverse logistics to reduce costs and meet CO₂ emission targets. This involves investing into technologies and processes such as digital product passports and automated warehousing, so that businesses can make returns operations more efficient, cost-effective, and less carbon intensive,” it said.
Of course, changing anything to do with returns could meet resistance, (unless those changes are about things like faster refunds, something many surveys have said are important to consumers).
And it’s clear that many consumers still feel fully entitled to order multiple products and return them if they don’t want to keep them.
A new study from the Retail Technology Show (RTS) that takes place in London next month reveals that, despite the rising costs both to retailers’ margins and to the environment caused by the issue of returns, 32% of UK shoppers say firms shouldn’t ban serial returners.
It spoke to over 1,000 UK consumers and founded 23% of them feel that shoppers who return the most are often the highest spenders and therefore the most valuable customers to retailers,
But even here, consumers do seem to be on the same page as the BFC in some respects. The survey also found 26% saying that “rather than banning a serial returner, retailers and brands should take responsibility for preventing the return in the first place”.
The average shopper now returns 15% of the total number of items they buy online, the study showed, rising to 20% for Millennials and 22% among Gen Z shoppers.
And it cited Appinio’s latest study that shows 71% of UK shoppers won’t now shop with a brand or retailer that doesn’t offer free returns, while also referencing a Klarna poll that showed getting rid of free returns risked lost loyalty with 86% of consumers more likely to come back to online merchants who offer free returns.
As for that 32% who say retailers shouldn’t ban serial returners, it rises to 44% of Gen Z, while a further 31% said retailers shouldn’t ban serial returners if they kept some of their order.