Retailers are shouldering the cost of increasing online clothing returns, according to research by retail analysts Conlumino for online rewards and promotions firm, Webloyalty.
Conlumino found returning unwanted clothing to UK fashion retailers reached £90.76m last year, with the majority of this cost – £61.52m – being borne by retailers. This represents some 47.4m purchases returned over the cost of the year. The cost of a further 13.6m returns, some £29.24m – was taken on by British consumers.
Conlumino managing director Neil Saunders said: “An increase in the number of fashion orders placed remotely has led to a corresponding increase in the number of returns, with the largest share of this cost falling on retailer’s shoulders.
“Returns are a particular problem in fashion where consumers are now used to ordering multiple items in a range of sizes, colours or cuts in the knowledge they can easily send back items that they don’t want. In many ways, the home rather than the store has become the fitting room, often at the retailer’s expense.”
While many retailers do build in some cost of returns, there is the danger as remote channels continue to grow, the cost of servicing the consumer also grows. This situation would inevitably erode profitability, said Conlumino. The ideal situation for retailers is to minimise the volumes of returns while growing sales. To do this, they may need to revisit how the returns process fits into their multi-channel strategy.
Guy Chiswick, managing director of Webloyalty UK, said: “The emerging trend of the bedroom replacing the traditional fitting room should be seen as an opportunity for retailers rather than a barrier to growing digital sales channels.
“Traditional stores have long recognised giving styling advice in the fitting room can contribute to both customer loyalty and sales growth. The multi-channel retail environment is well positioned to bring this styling advice into the consumer’s home. Mobile and tablet channels are the perfect format for providing customers with styling advice and enabling them to share ‘looks’ via social media. In this way, retailers can seek to minimise returns while at the same time increasing engagement and loyalty with consumers. ”