Sustainable Fashion: Intelligently reducing the returns mountain
Welcome to a monthly column within our broader sustainability section which focuses on what fashion is doing to address the issues in its industry brought to you by Retail Insider with Clipper and Give Back Box
Returns are a massive headache for retailers and are also detrimental to the environment – from the unnecessary transportation required and the potential that the garments will ultimately have to be scrapped and end up in landfill.
Retailers are caught between the proverbial rock and a hard place. If they decide to tighten up their returns policies then they will invariably lose some sales but on the flip-side if they continue to allow serial returners the full freedom to act irresponsibly then their margins will come under ever more pressure.
This scenario is similar to that of online payments fraud. It is possible for retailers to effectively have zero levels of fraud if they implement the strictest of policies and harshest of filters but the downside is that they will also screen out plenty of legitimate transactions in the process.
It is clear that the objective should be to strike a balance between the two but as with all such scenarios this is much easier said than done. Part of the issue is that as soon as retailers even suggest they are to introduce more restrictive policies (including possible charges for returns) then they inevitably endure flak from the media and customers who all plead total innocence of ever engaging in serial returning activities.
Amazon, Asos and Harrods are among the growing number of retailers that have gone public about their new policies. This can include the closing of accounts or placing restrictions on those individuals who have been identified of things like requesting too many refunds or sending back the wrong items.
It is not particularly surprising really that customers are kicking up a fuss as the historical objective of all retailers with online has been to make it as easy and seamless as possible for people to return unwanted goods – irrespective of how many items they send back and all at no cost to the customer. As many as 72% of online consumers are unwilling to spend any money at all on the return element of online orders, according to recent research from GlobalData.
The plethora of ‘buy-now-pay-later’ solutions that have recently emerged have made the situation even more acute. They are designed to boost the order levels of customers by offering easy credit and payment terms and in doing so they have made it so easy for purchases to be made that many are clearly being made without the necessary thought going into the suitability of the items.
It is interesting to note that retailers experience massively reduced levels of returns when fulfilling orders for customers based overseas. This is because those consumers know – and accept – that the process of returning items will not be anything like as seamless as it would be in the retailer’s domestic market and will invariably come with costs and longer wait times for refunds.
Clearly when such obstacles are seen as an accepted part of the transaction then it is not regarded as a problem to the customer. But with the current widespread practice and expectation of frictionless returns in the UK, it will require a resetting of the rules of engagement between customer and retailers for change to happen.
This change in mindset can be done through highlighting the sustainable and environmental damage that returns are inflicting on the planet and that shoppers should be more thoughtful when making their purchases. This will clearly resonate with a growing number of consumers but to really address the returns headache on an industrial scale retailers need to begin to fully utilise the variety of clever technologies that are now available in the marketplace.
These encompass sizing tools, whereby customers are much more likely to order the correct size, and fashion fingerprint-type solutions that hold detailed information on shoppers including sizes and preferences, which are used to guide them to the most relevant purchases that will ultimately reduce the likelihood of items being returned.
Retailers should also be more intelligently identifying serial returners and other individuals who are taking advantage of the system through the use of AI technology where patterns of orders, purchases, and returns can be spotted and quickly acted upon.
Based on this intelligence retailers could avoid having to implement blanket restrictions on customers and instead be more tailored in their response and base it on the specific behaviour of each person. This could involve a gradual approach to placing obstacles in the returns process of these individuals.
Reducing returns clearly requires much thought but the upsides are obvious. It not only removes retailers from between the rock and a hard place but also dramatically improves their environmental credentials.