Since the COVID-19 pandemic especially, many consumers have moved away from visiting high streets and shopping centres, and physically shifting through racks of clothes, to browsing items from the comfort of their own homes and making purchases at the click of a button.
The boom in e-commerce and online shopping has seen the fashion sector now have to deal with a higher rate of returned items, sometimes up to 40 per cent. In late 2020, consumers were returning around 17 per cent of clothing bought online.
In response to this increased demand, fashion retailers Zara, Boohoo, Next, In The Style and Uniqlo have introduced charges for UK customers to return online orders. Zara now charge GBP 1.95, whereas Boohoo deduct GBP 1.99 from the amount customers are refunded. Similarly, In The Style deduct a GBP 2.50 admin fee from the refund amount.
More and more retailers are looking to charge for returns, as the high rate of returned items is hugely impacting their profit margins. These negative financial effects are a key reason why fashion brands are now adding additional costs, and why they are driving this change in behaviour rather than the consumer.
Alongside profit margins, reducing their carbon footprint and working in ways that are environmentally-friendly are at the forefront of retailers’ minds, as many consumers are now specifically seeking brands who are sustainable and conscious of their global impact.
Rhenus Warehousing Solutions Lutterworth is helping retailers put measures in place to reduce returns, in order to drive sustainability and break the fast fashion mould.
Kerry Delaney, Managing Director at Rhenus Warehousing Solutions Lutterworth, said: “Across our distribution centres, we are able to process returns in a way that is reliable, fast, cost-effective and, most importantly, environmentally-friendly.
“The use of experienced fashion operatives and the development of innovative solutions and automation can guarantee an increase in delivery speeds, from retailer to consumer and back again, ensuring that stock is able to quickly be returned to sale.
“Fashion operatives will be able to rework and repair products, allowing them to be put back on the market in a re-sellable condition and reducing the amount of clothing that ends up in landfill. From a cost perspective, evolving these systems will also provide retailers with a more beneficial, long-term solution.
“However, the real way that retailers will survive this new era of fast, online fashion is by implementing innovative solutions to avoid a high level of returns in the first place, such as AI driven technology to predict an accurate fit of garments, assisting the purchase decision of the consumer.”
The common practice of ‘bracketing’ clothing purchases online is damaging to both retailers’ profit margins and the environment, as once returned, purchases enter the reverse supply chain and often end up in landfill. Overall, this transportation process contributes 15 million metric tons of carbon dioxide into the atmosphere.
‘Bracketing’, along with other negative habits, is a consumer behaviour which Zara, Boohoo and other global brands are taking the bold step to discourage.
Kerry continued: “Brands can avoid high levels of returns by working to improve product descriptions, as the main reason items are returned is due to them not fitting or meeting expectations. For many consumers, the bedroom has become the changing room, however if online shoppers are provided with more detailed information, measurements and realistic photography, they will be less likely to need to order one garment in multiple sizes.
“Another major reason that clothing is returned is due to consumers buying an item, wearing it once and then returning it. By adding a small charge, shoppers will be dissuaded from making spur-of-the-moment purchases, and instead only buy garments they are certain they’ll want to keep long-term.”
Research commissioned by Retail Economics and Penningtons Manches Cooper has shown that 46 per cent of shoppers who return products prefer the convenience of returning unwanted items to physical stores. If retailers can capitalise on this, by offering a positive returns experience and encouraging consumers to visit stores in-person, less and less returns will be made online.
Whilst this will benefit the retailer, the push to drive returns to stores still has little environmental advantage. In an ideal world, brands should be pushing to remove the need for returns altogether, which will not only result in financial gain for themselves but also have a positive ecological impact.
Kerry added: “Focusing on brand loyalty and providing consumers with excellent customer service, and a more personalised experience, will slowly but surely result in shoppers having less desire to bulk buy and return unwanted items.
“This is a key moment for fashion brands to secure their place as the retailer of choice in a demanding, digital world, and at Rhenus we’re on hand to offer all our support and expertise.”
Rhenus Warehousing Solutions Lutterworth has over 30 years’ experience working with high-profile brands, and handles hundreds of millions of fashion items per annum.
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