The Economic and Environmental Cost of Fashion Free Returns
In the early days of e-commerce, I preferred to shop at a brick-and-mortar stores in order to prevent minor mishaps, such as getting the wrong size or colour. However, when I moved to Manchester for my studies, I became entrapped in the joyous online shopping experience. I would buy anything from any store that had a ‘Free Shipping & Returns’ feature stated on its website. I ended up squandering my money on the indulgence of online shopping without having to worry about any misgivings because I could easily return the product and get the money back safely into my account.
According to Statista, Clothing shared the biggest percentage (30%) amongst other items that have been sent back after an online order in the past 12 months in the UK. Fashion brands seemed to be in a competitive race to offer the most convenient and comprehensive return services. Ampersand sorted out the top-performing retailers based on their return services. In its 2019 report, it mentioned that brands should offer free of charge return services through numerous channels — free return to the store, free returns to non-store locations, free returns by post, and free returns by collection — to get the highest score.
Eventually, my euphoria of the hassle-free returns began to ebb after my Interdisciplinary Sustainable Development lecturer, Fatemeh, explained that the carbon footprint of returned items were relatively high. Optoro, a company that specialised in returns logistics, acknowledged the same idea. Each year in the US, customers returned approximately 3.5 billion products, of which only 20% were defective in reality. Return practices were also proven to be unsustainable since it engendered 5 billion pounds of waste every year and produced 15 million metric tons of carbon dioxide to the atmosphere.
Returns were economically and environmentally dreadful in the eyes of the business. From an economic perspective, returns created a hefty burden for companies. Returned goods would be shipped back in which the cost would endured by the companies. Moreover, the goods were most likely to be flawed or not in the appropriate form to be resold by the brand. They could only be sold cheaply to discounters. From an environmental perspective, returns created a giant carbon footprint due to the shipment process. Additionally, for the companies that did not have the technology to handle this issue, items would end up in landfills or burned.
Burberry admitted that it had incinerated 28 millions of unwanted products over the past years. This action needed to be taken to protect their Intellectual Property (IP) and brand values. The brand could not afford the risk of having its product worn by the wrong people after emerging on to the grey market at a knockdown price. Even though Burberry claimed to work with special incinerators that could harness the energy from the process, still, environmentalists hurled criticism at the brand due to the lack of respect for the hard work and natural resources that were used to make the product.
Many brands strived to curb return products by prompting the customer to buy smarter. According to Bodyblock AI, 72% of American shoppers returned items due to size issues. People inclined to take the ‘Free Return’ feature lightly and arbitrarily. They would buy three shirts with different sizes from online shopping, only keeping the one that fits and returning the rest without having a twinge of remorse about the consequences. Brands needed to look thoroughly at the number of clothes that were being returned and how it had impacted the company and started taking an agile response to address the issue.
Internet of Things could help the customer getting the right item in the beginning by providing real-time information on available colours and sizes. It enabled the brand and customer to interact with the sales assistant virtually. Hence, the sales assistant would be able to answer directly if a customer had questions regarding the sizes, fitting, etc. Integrated with Artificial Intelligence (AI) technology, brands could form a chatbot that could engage with the customer 24/7. This would also enhance the customer’s shopping experience and reduce customer’s propensity to buy first and return later.
Artificial Intelligence is a cutting-edge technology that could help companies to reduce forecasting errors by up to 50%. AI allowed brands to scrutinize customer’s behavior and tailor recommendation based on their style preferences. If the customers were exposed to the clothes based on their likings, they would be more conscientious and prevent remorseful impulsive buying that led to return. AI could also understand the brand’s size chart and suggest the size that fits the online customer. Additionally, it could analyze customer’s returning habits and dispense a report that covers how much carbon footprint that a customer had engendered in a year through their habit which later would affect their customer points.
Augmented Reality (AR) is a technology that is capable of adding digital elements onto a smartphone camera, create a seamless illusion that the element is a part of the physical world around you. Furniture retailer, Ikea, allowed a customer to use AR to portray how its furniture going to look like in their room or how is the color going to mesh with the other things in the room. Fashion brands could utilize this technology by enabling customers to see how the fabric is going to look like on their bodies. Augmented Reality helped customers to make confident decisions.
Concisely, free return would always be the option that the brand offered because it created value for the customer. More promising return services were taken by brands to distinguish them from competitors. However, this pernicious practice had economically distressed the business and menaced the environment. These conditions enforced brands to take further steps in making customers to become more decisive and considerate when buying things online. Integrating their business with the Internet of Things, Artificial Intelligence and Augmented Reality are some of the ways that the brands could take to combat the obnoxious returning habit and buy smarter.
