By Shingo Tsukamoto, President of sizing technology specialist, Makip.
There’s no getting away from the fact that the UK’s ecommerce and apparel retailers are facing a returns crisis – a crisis some may say is of their own making.
It’s well-documented that over the last few years, consumers returning clothing items to retailers has significantly increased and exerted significant pressure on the already extremely frugal profit margins, as shown in mid-2022 when Boohoo blamed an increase in returns for a 94% slump in pre-tax profits.
When you consider that the top reason for returns was incorrect sizing or fit, with online returns costing retailers an average of £20 for every returned package – retailers need to act to curb this global issue, which is costing an estimated $642.6 billion worldwide.
Shoppers have been spoiled with access to free returns from retailers despite retailers such as Zara, New Look, Mountain Warehouse, THG and Moss Bros starting to charge for returns. However, it will take time for consumers to change their habits as changing behaviour is a challenging feat.
This shift should act as a much-needed wake-up call for retailers to understand the root causes of returns and decide how they can reduce the number of returns, without damaging customer value. Retailers should not dismiss investing in sizing technology, which may help them to claw back the cost of returns and address the crisis which is costing consumers, retailers and the environment.
Curbing the returns crisis with tech
Is sizing technology the answer? Unfortunately, there is no silver bullet, but feature-rich, accurate and user-friendly sizing technology has the potential to significantly reduce clothing returns, by an average of 20%.
While sizing technology can help customers make more accurate size selections, there are several factors that contribute to clothing returns. Although not all of them can be addressed solely through sizing technology, eCommerce and apparel retailers should consider technology as a key weapon in their arsenal for combatting the returns crisis.
Three key factors are:
Improved Size Recommendations: Comprehensive and advanced sizing technology, such as body scanning or virtual try-on applications, can provide increasingly precise size recommendations based on customers’ unique body measurements. This helps customers choose the right size more accurately, reducing the likelihood of receiving ill-fitting clothing and the need to return items, whilst boosting their confidence in using the technology.
Virtual Try-On: Virtual try-on technology allows customers to visualise how a garment will look on them before making a purchase. This can give them a better sense of how the clothing will fit and look on their body shape, potentially reducing the chances of dissatisfaction upon receiving the product.
Customer Data Analysis: Retailers can analyse sizing data from their customers to identify patterns and trends. This information can help them optimise their inventory and tailor their product offerings to better suit their customer base, further reducing the chances of sizing-related returns.
As we look towards the future, it is hoped that sizing technology could potentially help standardise sizing across different brands and retailers. As size discrepancies between brands are a common reason for returns. If customers can confidently rely on sizing information, they may be more likely to find the right fit – ultimately reducing the need to return items and boosting consumer, and retailer confidence in the technology.
Bottom line impacts
Ultimately investing in any technology comes down to how it can both save and bring in more revenue.Sizing technology has the ability to positively impact conversion rates by enhancing the customer experience and reducing returns due to sizing problems.
Through the provision of personalised recommendations and improving customer confidence, it can also increase the average order value. Retailers that effectively leverage sizing technology stand to gain a competitive edge by offering a better shopping experience and building stronger relationships with their customers.
The technology also has the potential to support retailers in clawing back some of their costs when shoppers return clothing items through strategically implementing sizing technology and leveraging the data it generates, retailers can not only reduce costs associated with returns but also enhance the overall customer experience, leading to increased customer satisfaction and loyalty. This, in turn, can contribute to improved sales and revenue.
There are of course pros and cons for every investment, but looking at the increasing pressures placed on retailers to curb returns from a financial, reputational and environmental standpoint, not investing in sizing technology can expose retailers to various risks. These include increased returns, reduced customer satisfaction, missed sales opportunities, and decreased competitiveness.
The leap of faith
Ultimately, for sizing technology to be effective, it needs to be widely adopted and trusted by customers and respected by retailers through integration into online shopping platforms.
Achieving this level of adoption may take time and may not be uniform across all retailers.While sizing technology plays a significant role in helping reduce clothing returns by improving size recommendations and virtual try-on experiences – there is a long way to go as retailers look to claw back as much revenue as they can and curb the returns upward trend, whilst satisfying customers.
I would implore retailers not to dismiss sizing technology, but to embrace it as a strategic move to stay competitive and relevant in the evolving retail landscape.