Return rates for many retailers can make or break a company, particularly those in fast fashion.
Across the UK retail sector, return rates to bricks-and-mortar stores pre Covid averaged around 8%.
Compare that with a hefty 40% returns rate for online purchases!!
It's no secret that to build an online fashion business it's vital that you factor in those high 'return rates' into your financial models.
In the US on average, retailers expect to get back about 16.6% of the total merchandise that customers purchased in 2021, according to survey results released Tuesday by the National Retail Federation and Appriss Retail. That’s a jump from an average return rate of 10.6% in 2020.
Research from VoucherCodes.co.uk has revealed that 33% of all online orders were returned last month, with the average person placing six online orders. After returning one in three of these purchases, the average shopper will have spent a total of £32.42 on delivery and returns.
More than two thirds of UK shoppers (68%) frequently spend more than originally intended in order to hit the minimum spend threshold and qualify for free delivery.
When it comes to scouting out discounts, almost one in three (29%) consumers admit to exclusively shopping with retailers that offer free delivery.
Those aged 18-24 spend an average of £20.39 more on items they didn’t initially want, just to qualify for free delivery. Meanwhile, just 6% of over-55s will bump up their order in order to avoid delivery fees, and only by £12.37.
We recently witnessed the demise of online fast fashion company 'MissGuided' whose policy was to allow several items to be added to the checkout with the promise of free returns for those items you no longer needed. The reasons being not the right fit or didn't like them. Clearly the acquisition by 'Frasers' and reappointment of the founder Nitin Passi as CEO must mean they know something that industry veterans don't?
We also see the BooHoo Group share price hitting an all time low as it's myriad of fast fashion brands operate a similar model, which in my opinion is compounded even more as a result of the 'buy now pay later' options that seem to have become central to higher AOV.
The increase of buy now, pay later schemes such as Klarna mean that one in six consumers (15%) admit they pay no attention to delivery fees, as they put it off until later.
A change is in the operating and 'sustainability' model as Boohoo Group Plc and several other retailers who have finally become 'woke' are now considering charging customers to send back garments as an increasing rate of returns crimps sales at the fast-fashion retailer.
With 4bn+ people around the globe on one social platform or other why is it brands don't seem to utilise 'Social Media' for something other than to 'advertise and promote' themselves?.
We do see is them using it as a 'reactive' way to manage disgruntled customers, but for some reason they prefer not to 'engage' in conversations with you and me.
Social platforms are a great low cost way to help inform and educate consumers around sizing and other valuable information that can create a win/win situation and help to take the strain and stress out of the process for all.
What else should they be doing?
The British firm, whose business is purely online, is looking at returns across all markets, Chief Executive Officer John Lyttle said in a phone interview Thursday, at a time when many retailers are trying to manage logistics costs. While Boohoo already charges in some international markets, the move would be a first in some places, including the UK.
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