Improving product return rates can have a big impact to a retailer’s bottom line. ASOS has previously quantified that a 1% drop in customer returns would translate into an additional $16million to the company’s bottom line.
So how do you improve return rates? Fundamentally, one of the biggest conversion hurdles and a predictor for apparel returns is product sizing and fit. There are significant cost impacts for retailers due to the labour, shipping and inventory expenses involved.
Fits.me, a London-based developer of sizing software, estimates that around 80 percent of all clothes bought instore pass through a fitting room, so it’s not surprising that online purchases made without a fitting room interaction need to be returned. The company (used by brands including Adidas, Hugo Boss and T.M. Lewin) interviewed German shoppers and identified that 35 percent aborted potential purchases because of concerns about fit.
Globally, businesses lose an estimated $8.4 billion each year because of incorrect sizing for online purchases, according to a retail research firm IHL Group.
Providing a better fit will see a big reduction in return rates, saving money for retailers and ultimately providing happier customers. Some improvement opportunities include:
- Improved product photography - leading retailers provide product imagery of their products on model, as well as detailing the model’s height, weight and size worn, such as this example from ASOS. This level of detail allows customers to better approximate product fit.
- Body scanning - emerging technologies such as Bodymetrics and Styku that use sensors developed by Microsoft for its Kintect platform to create 3D avatars will help determine the correct size. A customer simply gets scanned instore and the software compares their measurements with the exact dimensions of garments to recommend the perfect fit. Bodymetric’s scanners are already in use in select Bloomingdales and Selfridge’s locations.
- Product comparison tools - True Fit provides software to retailers that predicts how other garments will fit based on brands and products that a customer already owns. Their tools have had good success by reducing the return rate for a premium denim retailer from 50% to 20% for 400,000 customers. See it in use at House Of Fraser.
Whilst not directly reducing return rates, providing instore returns presents a convenient option for customers and facilitates another opportunity for brands to interact by allowing for complimentary or alternate products to be presented. One critical aspect is to ensure that the process is seamless from a customer perspective, particularly ensuring that stores aren’t disincentivised from facilitating customer returns.
Ultimately, allowing customers to better identify sizes and brand preferences will result in a better customer experience and bottom line.