Eoin Cambay, Founder & CEO, Swan
Aug 3, 2023
Clothing returns in 2023 v 2013
Back in 2013, the founder of Fits.me – one of the original virtual fitting rooms, now defunct – would happily tell people that the biggest competitor to virtual fitting rooms were the likes of DHL, FedEx, or any of the other options available to shoppers for last mile delivery/collection. If returns were cheap enough and convenient enough, shoppers would cease worrying about ordering the wrong size when buying clothes online, removing some of the motivation for using (or for retailers to provide) a virtual fitting room.
And, during the last decade, retailers and brands have indeed improved their returns processes and became much slicker. Significant competition in the last-mile delivery/collection sector ensures that pricing is keen. Returns Management Systems (RMS) are now well-established, aiming to make it easier for shoppers to return (and cheaper for retailers to process) unwanted items. There are organisations to which retailers and brands can outsource the entire management and processing of returns. All these evolutions have been most welcome, because returns are a fact of retail life, and of online retail in particular.
Shopper expectations around returns continue to rise
However, customers are a tough crowd whose expectations around returns continue to rise. A March 2021 report found that:
82% of online shoppers agreed that retailers in general need to improve their returns capability
84% wouldn’t shop from a retailer again after a bad returns experience
80% (up from 77% in 2019) saw returns as a normal part of online shopping
81% (up from 75% in 2019) expect retailers to offer free returns
The latter point in particular, is likely to be a particular source of friction: some commentators consider the era of free returns to be well and truly over – ironically, brought about by perceived abuse of the offer by a too-high proportion of shoppers. (And, sometimes, retailers don’t help themselves: over a fifth of retailers ‘hide’ their returns policy.)
While customer expectations around returns have continued to rise and retailers’ technical capabilities to process returns has improved, the reasons for returning haven’t significantly changed. Customers return items for a variety of reasons – but issues around fit remain the single biggest category for fashion returns: an average of 52% of returns are for reasons of fit, according to Shopify. In other words: while the technology and processes necessary to enable returns have developed out of all recognition, retailers have struggled to successfully address the root causes of returns in the first place.
Sustainability: a ‘growth issue’ affecting conversions and returns
So, much about returns remains unchanged: the primary reasons for returns endure, and customer expectations exceed retailer capabilities. But, in the last few years, a new issue has arisen for fashion retailers: sustainability. High-profile media reports of sustainability ‘fails’ by the fashion sector mean the issue is now permanently front-of-mind for shoppers: from manufacturing (sources of materials, sources of labour) to transportation (to the markets where the garments will be sold) to disposal of unwanted garments.
A report in 2014 indicated that, even then, 12% of shoppers felt guilty about the environmental impact of returning items. More recent research (2022) suggested that 75% of Gen Z prefers to buy sustainably rather than go for brand names. The result? If their personal threshold for sustainability isn’t met, many sustainability-conscious shoppers will choose to not convert, rather than risk choosing the wrong size and being responsible for an avoidable return. For such cohorts, the issues of conversion and returns are now inextricably linked.
A Swan AI fitting room shows your commitment to sustainability
With ethical shopping on the rise, there is considerable motivation for retailers to demonstrate sustainability. But for the ordinary shopper, it takes a lot of effort to investigate the sustainability credentials of a retailer. And, in the face of often considerable cynicism, it is equally tough for a retailer to demonstrate sustainability credentials to a shopper.
A Swan AI fitting room is an opportunity to show shoppers that you are taking practical, unambiguous and effective steps to reduce returns for reasons of “wrong size”. It’s entirely possible to remind or even ask your shoppers your AI fitting room before they put an item in their basket: “Please use our AI fitting room; it helps to make our operations and your purchase more sustainable by helping you to choose the right size first time”. In doing so, you overcome the inevitable ‘conversion hesitation’ of sustainability-aware shopper cohorts, while simultaneously reducing wrong-size returns by helping to ensure correct size selections.
It’s tempting to imagine that the returns issue has been minimised by technology over the last 10 years - but the numbers tell a different story. And, in fact, increasing sustainability concerns among shoppers are adding new complexity to the issue. Failure to address unnecessary returns still costs money and still impacts net revenue – it’s true that there’s no change there. But, increasingly, the returns issue has the potential to impact conversion rates, costing sales and shopper loyalty/goodwill even before you get to that point.
Explore our site to learn more about how a Swan AI fitting room can be an important element of your strategy to minimise returns.