Dying from success: ecommerce returns

In the last decades we have witnessed a real transformation in the way we buy things. We all probably started by buying online the odd product that we could not find in retail stores nearby, but e-commerce has progressively expanded to such an extent that we now may even find ourselves buying online products that we could easily find in our town. 

In terms of clothing, as shopping online has become more frictionless and convenient, an increased number of customers have changed the hassle of store dressing rooms for the quiet of their full body mirrors at home. But how come that so many customers venture into buying online clothes that may not fit or suit them? One of the reasons for this explosive growth in online sales has been the implementation of easy return policies: buy it all, return it later.

As it happens though, these successful return policies are dying from success—so to speak, as returns are becoming one of e-commerce’s biggest problems. The average physical retailer has a return rate in the single digits, while online, this is between 15 and 30 percent. In fashion, the rate is even higher due in part to bracketing (the practice of ordering several sizes or styles with the mind to return those that do not fit or those that we don’t like.) Many retailers now offer free shipping, free returns and frequent discount codes, all of which promote more buying—and more returns. According to the National Retail Federation, consumers returned an estimated $428 billion in merchandise to retailers last year, approximately 10.6 percent of total U.S. retail sales in 2020 (physical stores included.) We do not have available numbers for European shop returns.

Perfectly good clothes get thrown away by companies more often than we think, simply because doing anything else doesn’t financially work out. All of that unwanted stuff piles up. Some of it will be stripped for parts and some of it will go directly into an incinerator or a landfill, this is why at Tekstila we work on solutions to divert these new, unused clothes through commercial stock channels, so all clothes arrive to their 1st use. We want all clothes to be worn and because only a tiny amount of returned garments can go back to the mainstream market, we also find new retail opportunities for these returned garments. As always, brands can find a solution for unsold stock with us to recover the investment and make sure they brand is sold in protected channels, specific countries and selected distributor profiles. 

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