Jul 11, 2020
An expensive problem for the online fashion industry: Too many returns
One of the biggest challenges facing fashion ecommerce is one that has troubled offline retailers since the introduction of mass-produced clothing: sizing. The human body, with its diversity of shapes and dimensions, simply does not lend itself to uniform standards when it comes to clothing sizes, explains Suzanne Kapner in an article for The Wall Street Journal. As a result, sizing tends to vary from brand to brand and even within a single brand’s product mix.
The concept of sizing itself is fluid. As each clothing brand gains insights about its customers, they produce clothing that better fits those customers’ body shapes and sizes. The result is that different brands use different dimensions to represent the sizes of their typical client. While this strategy ultimately presents consumers with a wider range of fits, it also makes the search for that perfect fit more challenging. In fact, among thousands of consumers surveyed in the fall of 2019, 70% said that finding clothes that fit was “very difficult,” reports Kapner.
Online fashion buyers struggle to find the right fit
Consumers searching for fashion online face even more difficulties than their offline shopping counterparts. These shoppers must rely on sizing charts, product descriptions, images, and information shared by brands and, in the best case, other shoppers to make their buying decisions.
But these strategies don’t always work.
In another 2019 survey, this one conducted by customer experience platform Narvar, the number one reason consumers stated for returning online purchases was that the item was the wrong size, fit, or color. A Yopto survey found that 79% of fashion shoppers who returned items because they were dissatisfied with an item’s fit or quality. Online shoppers also said they sometimes made returns when an item looked different in person than it did online.
A lack of effective sizing and fit solutions leads consumers to make purchases that don’t meet their needs.
Compounding the problem, many consumers who aren’t certain about which size they need when placing an order engage in a practice called “bracketing.” Bracketing, explains WWD’s Navjit Bhasin, is when a customer intentionally purchases an item in several different sizes or colors with the intention of trying all of them on at home then returning the ones that don’t suit them.
Poor fit costs fashion e-tailers in more ways than one
When customers’ apparel orders don’t meet their expectations, return rates increase and consumer confidence erodes.
Returns due to poor fit, unmet expectations regarding color or size, or bracketing are expensive and resource-draining for online retailers, particularly those that cover the costs of shipping for their customers. Companies may have to absorb both outgoing and return shipping costs as well as the expenses of processing and restocking the unwanted items.
The scope of the problem is huge. High rates of return create logistical and financial problems for ecommerce sellers shrinking their margins and limiting their growth. According to research by Shopify, return rates for online fashion purchases range from 30% to 50%.
Apparel returns add to online retailers’ expenses and reduce their revenues
The U.S. Postal Service reports that handling and processing cost businesses an average of $10 per return. This cost is in addition to the expense of sorting and redistributing merchandise once it reaches a vendor’s return center. Additionally, because apparel may be out of season or otherwise less attractive by the time it is returned, online sellers may have to take markdowns to resell the returned pieces. Fewer than half of returned items are resold at full price, says Jasmine Glasheen of The Robin Report.
Further, not all merchandise can be salvaged. Reverse logistics platform Happy Returns tells Vogue Business writer, Jessica Shiffer, that 10% of the fashion items it processes are donated or incinerated. Merchandise that can’t be redistributed is costly not only for businesses but also for the environment. In an interview with CNBC, Tobin Moore, CEO of logistics technology company Optoro, notes that approximately 25% of all returned items — 5 billion pounds of goods each year — end up in landfills.
Combined, online and offline returns cost retailers nearly $400 billion annually, says The Robin Report.
The costs of returns cut away at ecommerce’s already slim margins. Online apparel retailers need margins per garment that are 10% to 15% higher than their bricks and mortar counterparts to be profitable Spanish retailers told the fashion business journal MDS in January of 2020. This margin is needed to cover the higher costs of customer acquisition, distribution, and returns that online fashion retailers experience.
These executives also told MDS that as competition for fashion ecommerce heats up, increasing sales volume and retaining loyal customers will be essential for brands’ survival. Here too, getting the right fit for customers will play a critical role.
Brand loyalty suffers when customers make returns
In addition to the financial burden of processing returns, brands that fail to match their customers with the right size and fit risk losing consumers’ confidence and loyalty. Particularly among new customers, a bad return experience causes churn, Narvar’s 2019 State of Online Returns report found. According to the study, 31% of new customers would not shop with a retailer again if they had a difficult return experience. Repeat customers, too, may become frustrated if they are unable to find the sizes they need.
While losing a single customer is bad enough, the cost of poor fashion fits doesn’t stop there. Social proof is a powerful driver of online sales and conversions. Customer reviews and testimonials are a leading resource for shoppers looking for new brands. One study found that 95% of users rely on reviews to evaluate and learn more about products.
A separate report indicates that ecommerce brands that display reviews on their websites can increase conversions by up to 270%. Both positive and negative reviews impact prospective customers. This means that each customer’s experience with an online fashion brand has the power to impact that brand for better or worse.
Does fit matter when customers review apparel? Yes. Sizing is so important that on Amazon.com it has its own category. When reviewing a clothing purchase, consumers can indicate whether the item fit as expected or not.
Beyond reviews, informal social proof in the form of social media posts can boost or depress a fashion ecommerce brand’s performance. A report by Cotton Incorporated’s Lifestyle Monitor states that 46% of consumers ages 25 to 34 use social media as their primary source to find new fashion ideas. And, according to social marketing platform Curalate, 82% of consumers who receive a recommendation from a micro-influencer are likely to buy the recommended product. Winning the loyalty of micro-influencers and converting customers to brand ambassadors depends on delivering a frictionless, quality experience with no misfits.
What can ecommerce fashion brands do to help ensure their customers find the right fit?
As fit technology continues to improve, fashion brands have an opportunity to improve their customers’ experiences and reduce return and churn rates. In her piece for the Wall Street Journal, Kapner lists several companies that are developing technologies to improve the state of apparel sizing including My Size, Hemster, and True Fit. Other companies developing solutions to online fashion’s fit problems include TailorGuide, Sizer.me, Virtusize, and Asos. These solutions take varying approaches to address the fit problem including virtual try-on tools, personalized measurements, and fit-based searches.
In addition to incorporating these apps into their online shopping experience, fashion retailers can take the following steps to improve their customers’ experiences and reduce returns:
- Provide consumers with detailed product information including fabric descriptions and garment measurements
- Create size guides that include multiple points of measurement
- Publish instructions for taking proper measurements
- Offer customers a diverse selection of fit models to model each item
- Display multiple high-quality images that capture garments from several angles
- Encourage customers to leave honest feedback about the fit, feel and quality of the items they purchase and share images of themselves wearing their new clothes
E-fashion’s continued growth depends on its ability to adapt to changing consumer demands
2020 has shaped up to be a watershed year for online commerce with many consumers turning to online retailers for the first time. To maintain this momentum and continue to meet customers’ needs while increasing revenue and reducing waste, online apparel sellers must continue to seek innovative solutions to reduce consumer returns.
