ONLINE FASHION RETURN RATES OF 15-50%, BUT WHY?
In FORBES.com appeared an article by Timo Elliott during New York’s Fashion World discussing technology disruption in fashion and how “Returned items is one of the biggest costs for online retailers, with return rates of 15-50% depending on the type of item, and 60% of the time that goods are returned, poor fit is cited as the reason.”
Or 1,6 – 5,4% of shopping basket revenue managing returns from poor fit. This percentage takes out-sourced or in-sourced returns management expenses, resources, shipping fees, payment transaction fees, financial reconsolidating (refunds, matching invoice and payments), cleaning, repairs, restocking, lost sales, extra inventory, cost of reduced cash-flow, write-downs, and other quantified expenses.
There are several approaches trying to tackle “poor fit” but in my opinion none offer a holistic root cause approach. These include building personal “Avatars”, scanning / photographing yourself (clothed or otherwise), or entering self provided personal body measurements, and require 3rd Party “perfect fit” vendor systems needing IT intervention and integration.
However, over the past 20 years of eCommerce, these have not proven engaging, efficient, or cost effective as suitable or sustainable long-term solutions. In principle, these approaches are, from a consumer perspective, not considered fit for the broad and diverse use with different shapes, sizes, ages, and genders, as they all rely in one form of other on direct input and ask explicitly for consumer action (different per system / retailer) before shopping basket completion. And as consumers often shop on multiple vendor sites and platforms, this potentially requires multiple personal profiles to be created, and maintained and soon becomes very tiresome for the shopper with little reward, leaving a negative customer experience.
There had to be a smarter approach that allowed consumers to concentrate filling their shopping basket with the “right fit” fashion items without first enduring the intentional self-sizing obligation, providing the retailer with additional time to focus on optimising their online store, inventory, merchandise and placement driving increased sales, consumer satisfaction, and advocacy. In short, focus on top line growth, revenue and margin.
This was worth tackling from my perspective and to make it challenging, I added one additional but important constraint: no additional disruptive steps during the end-to-end shopping experience.
Question I asked myself: Could I ultimately solve a 20 year enigma that reduced online shipped items returned due to poor fit and improve the 15-60% Returns rate? While improving margins and increasing customer satisfaction?
Working with a globally recognised American fashion, apparel, design, fragrance retail company, offering consumers high end products including men’s, women’s and children’s apparel, sportswear, denim, and a range of licensed products such as accessories, jewellery, watches, fragrances and home furnishings, I worked with one full season (12 months) of their online eCommerce shopping history in its raw, uncleaned format.
Applying my “out of the box” lateral thinking, style and innovation I solved this 20 year enigma and could drastically reduce shipped items being returned due to poor fit without needing consumer input (scan, size or building avatars with “body measurements”) before basket completion.
In the process unlocked and created an un-matched and unique ability for online apparel, fashion & footwear retailers to dramatically and substantially improve all returns metrics without consumer intervention - I reduced baseline-returns, increased profit, provided a competitive-advantage and accelerated the clients customer experience.
Results delivered:
48% reduction in goods returned due to poor fit
4% increased sell-through margins on line-items shipped
Increased customer satisfaction.
Rapid payback measured in weeks
My perfect fit solution was proved, repeatable and showed to offer significant reductions on any baseline Returns rate.
If you're interested in understanding your organisations unique returns target-reduction possibility, contact me to get your:
Precise understanding of your apparel, footwear & fashion items returned
Complete end-to-end operational Returns OPEX & impact metrics
Organisation's unique returns-reduction possibility - as a percentile target
Scenarios, action-based methodology and best-practices that could deliver your unique compelling return's target
Killer advantage gained through competitive price and improved profitiable margins
