Online clothes shopping has one big problem: Returns. Here's what retailers are doing about it

PHOTO: Pexels

Shopping for clothes online has never been easier. You purchase an item you love and try it on in the comfort of your home before deciding whether to keep or return it, no questions asked.

While the customer reaps all the benefits – free shipping and returns have become an industry standard, especially during the pandemic – the same cannot be said for the retailer.

The cost of return for a coat, for instance, can be two to three times more than getting it to the customer in the first place, according to research from professional services firm KPMG, based on UK shipping.

Meanwhile, compared to in-store return rates, which are around five to 15 per cent, e-commerce apparel returns are far more common, ranging between 50 to 80 per cent, according to an April report by research firm Bernstein.

Those figures are considerably worse when compared with other categories such as shoes and beauty.

“The category that most retailers consistently have the highest return rates for is women’s fashion apparel and that’s mainly due to sizing issues,” explains Aneesha Sherman, co-author of the report and a senior analyst for European general retail at Bernstein.

“During the pandemic, return rates actually dropped because women stopped buying items such as party dresses and opted for categories that don’t traditionally pose sizing and fit issues, such as sportswear and loungewear.”

While purchasing the wrong size is a common mistake – standardised sizing is a persistent problem in women’s clothing – it can also be intentional.

The Bernstein report highlights a trend known as “bracketing”, which is when a consumer orders multiple sizes of the same item with the intention of returning the ones that don’t fit, which means most of them.

A significant amount of shoppers buy multiple sizes of the same item knowing they can return the ones that don’t fit for free. 
​​​​​​PHOTO: Pexels

Around 56 per cent of shoppers globally practice bracketing, the report says, which causes additional costs for the retailer, from shipping and handling to cleaning, repacking and storing.

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Longer return cycles – it can take up to 52 days for an item to go back on sale online depending on the company’s return policy – can also have damaging effects on the company’s bottom line.

Some retailers even need to dispose of the returned item, which brings with it environmental and sustainability concerns.

“This is not a problem for the consumer – it’s more convenient for them to order five sizes, making it the retailer’s problem,” Sherman says.

“Saying that, bracketing is more of a new-customer practice – once you’ve done it a few times, the likelihood is that you won’t order the whole size range again. The worst outcome for the retailer is that they lose a sale and pay for returns."

“The sustainability issue can be addressed by changing a few things, such as the return period and processing time, which are constantly improving since the pandemic. (Zara owner) Inditex is a leading example. At Zara you can go into any store to return an item bought online and it will be on the floor (for sale) the same day. Even if you mail it in, it‘s back for sale within a few days."

“As fashion moves away from seasonal trends and sales, it means that items can be available to buy at full price for longer periods.”

The Fit Finder tool from Fit Analytics helps people figure out their size before buying online.
PHOTO: Fit Analytics

While sizing may be the biggest pain point in returns, it is also a solvable issue. More retailers are harnessing advancements in data and technology to provide better sizing and fit solutions for customers, which is likely to reduce the rate of returns.

These include fit predictors as seen on Farfetch and Asos, and newer innovations that use algorithms and AI technology. Online retailer Yoox’s Yoox Mirror, for example, allows customers to try on 50,000 fully digitised products on personalised avatars.

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Conversion rates on online retail platform Shopify increased 250 per cent for products supported by try-on technology, according to consultancy McKinsey’s “The State of Fashion 2021” report.

“It might sound surprising, but the biggest challenge for online fashion retailers when implementing technology is getting the consumer educated and willing to use the sizing solutions,” says Mar Mercade, chief product officer at Fit Analytics, a size advisor that works with brands including The North Face, Tommy Hilfiger and Puma.

“Though tedious, many consumers still go to the size chart for reference, so it is on the retailers and tech providers to educate consumers on the efficacy of sizing technology and normalise its use.”

The Fit Finder tool.
PHOTO: Fit Analytics

Fit Analytics’ Fit Finder product reduces return rates by four to five per cent on average and increases conversion rates by eight to 10 per cent compared to size charts, the company says.

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Mercade also points out that not all sizing solutions harness the same type of technology. Some use machine learning, while others use brand comparison.

For now, customers seem to gravitate towards simpler solutions such as questionnaires, although AR (augmented reality) is another area that could be used better as more shoppers go online.

“Today, so much is done on computers and smartphones that shoppers expect to be shown relevant items in a way that resembles the in-person shopping experience as closely as possible,” Mercade says.

“Any technology that fills in the gaps between bricks-and-mortar and online shopping is going to change the landscape in a positive way.”

This article was first published in South China Morning Post.