29 September 2022
4 min read
Returning to order: Improving returns management for apparel companies
High levels of retail returns are unavoidable; however, a good management of these can reduce their cost and, in turn, increase customer loyalty.
The growth of online stores added to the current poor management of returns in most eCommerce, triggers consumer behavior in which they do not have any type of risk when buying-returning a large number of products; especially for those ones in which the size/style can vary easily, such as dresses and shoes.
In the fashion industry, the interactions between eCommerce and consumers are changing in a way in which the number of product returns are being exponentially increased.
All told, in the US, the return rate of all products was 10.6% during 2020, with e-commerce returns accounting for nearly a quarter of returns volume. But apparel retailers see the worst of it.
A McKinsey Returns Management Survey conducted just prior to the COVID-19 pandemic noted a 25 percent return rate for apparel on e-commerce channels, compared to 20% overall. And with the sector’s e-commerce growing about 35% in 2020, the revolution of returns is now an all-time high reality.
However, controlling the management of all these returns is still a nightmare for the majority of eCommerce. Many retailers see high levels of returns from a really negative perspective, and they believe they need a generous returns policy to grow their share of wallet. According to McKinsey’s research, managing returns is not among the top five priorities for a third of retailers—and a quarter of the retailers surveyed don’t do so efficiently and effectively.
More important, the focus of attention is now much more centralized on logistics optimization and cost reduction rather than efficiently managing returns.
In a fashion-based business, any lag time that may affect the management of returns can significantly affect the resale of that same product.
In the accelerated world of omnichannel shopping, the financial impact of returns could become unsustainable for many apparel retailers. However, if retailers can improve their capabilities to manage returns, their customer experience could be improved, and some value could be added to their bottom line.
Nevertheless, thanks to REVER, the online-shopping returns experience is improved, allowing shoppers to return their purchases in just two clicks and receive their refunds in just a few seconds. Moreover, REVER is the only end-to-end solution for all post-sale services with a full-scale product that also integrates the logistics operations, a management software to improve the user experience and different compensation options which help eCommerce build customer loyalty.