Fixing Retail’s ‘Returning’ Issue

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Fixing Retail’s ‘Returning’ Issue

By Ronen Luzon - 03/05/2018

Fixing Retail’s ‘Returning’ Issue

Stop me if you’ve had this problem before — you are shopping online for that perfect dress for your friend’s wedding, or a new shirt for your next big business presentation. You find one you love, but words in the product description such a “slim fit,” “petite,” or “tall” have you unsure what size and fit is best for you. Your solution? You buy multiple sizes with the plan to send back the ones that don’t fit for free.

It’s the online equivalent to being in a dressing room in a brick-and-mortar store, but it’s also online retail’s most prevalent problem. The lack of a true sizing system results in buyer confusion, and often, the ordering of an ill-fitting item. Then it’s the retailer left to pick up the tab for the cost of return shipping, as well as resending a new item if it’s required.

It’s been reported that 20 percent to 30 percent of online apparel orders are being returned (with 70 percent of those returns due to problems with fit), costing the retailer anywhere from $3 to $12 per order. One study cites total expenses to e-retailers from apparel returns at $1.4 billion dollars, roughly 2.5 percent of the total online revenue ($60 billion) of apparel and accessories in 2015.

Returns have become such an expensive issue that we’ve begun to see legacy retailers change decades old return policies in order to cut costs. For the past 100 years, L.L Bean had accepted returns of basically any item, purchased at any time, with or without a receipt. But over the past five years, the company reported losing $250 million worth of returned items that could not be resold.

But many retailers still offer free returns for merchandise purchased online, putting a significant dent into the bottom line of a booming industry.

Sizing up the problem

The most sensible solution to excessive retail return is to fix the industry-wide issue related to product sizing. Despite best efforts across the industry, there is no universal system that drops everyone into an accurate bucket for their size. Where some retailers sell pants by waist and length, others tag them as small, medium or large, and there is no consistency across brand. Even where retailers offer a sizing chart, many consumers will still guess their size or opt for the size they prefer to be, leading to incorrect purchases.

Fortunately, there is technology available to the market that will allow consumers to take their true measurements utilizing a mobile device, which would then sync directly to a retailer’s sizing chart and only show the consumer items in a size that correspond to their exact measurements. This ensures a true fit and a correct purchase each and every time.

There are other technologies on the market that guestimate your size based off of photos you submit, or that ask you to enter what you think your measurements are so they can recommend what will fit you best. There is also 3D scanning, virtual try-on, and other big data methods.

The sizing and return issue has created a sizeable market opportunity for technology companies that can provide a solution enabling retailers to recoup these losses. As the industry continues to drive innovation, we should see retailers trying out these various solutions as a way to increase customer experience while also improving their own bottom line.

Ronen Luzon is the CEO of MySize, a developer of proprietary smartphone measurement applications.