The report, aimed at driving down rising returns rates, from British Fashion Council’s (BFC) Institute of Positive Fashion (IPF), DHL and Roland Berger indicates some 23m garments were sent to landfill or incinerated, representing 75% of the approx 3% of all returns that can not be resold.
Key findings of fashion returns report
- Incorrect sizing or fit (93%) and product quality not meeting expectations (81%) were the top returns reasons
- For 56% of shoppers, a returns charge is the measure most likely to prevent returns
Fashion returns are mitigated at the point of sale: Ultimately, the report found that the onus is on retailers to help consumers make the right choice, the first time, every time. Fashion businesses need to be more thoughtful about the products they are selling so that they are producing collections customers will want to keep. They should also be enabling shoppers to buy correctly by leveraging data and digital solutions. Investment in sizing calculators will become an industry norm and digital avatars an integral part of the future for fashion retailers. Roland Berger has calculated that large retailers with approximately 70% of sales coming from their website, could reduce cost of returns handling by 20-40% with the introduction of sizing calculators and avatars.
Free returns will become a thing of the past: Using an environmental message to prevent consumers returning goods currently holds no sway; some 56% of online shoppers surveyed indicated a returns charge or levy as the measure most likely to prevent them returning goods. The trade-off could be losing customers – but as more companies adopt charges it will become an industry norm.
Fashion returns are handled more efficiently: Retailers need to look closely at reverse logistics to reduce costs and meet CO₂ emission targets. This involves investing into technologies and processes such as digital product passports and automated warehousing, so that businesses can make returns operations more efficient, cost-effective, and less carbon-intensive.
Caroline Rush, BFC chief executive, said: “This project recognises the importance of investing in innovation to secure robust and profitable businesses while safeguarding the planet and society. The responsibility now lies with retailers and fashion businesses to reach the target state by implementing the necessary change across their entire businesses from production to reverse logistics.”
Siobhan Gehin, Roland Berger senior partner, added: “Tackling the returns issue is being prompted by lower consumption, impending legislation and higher operating costs – the latter probably being the strongest motivator for companies to move from a linear to a circular business model. While the future for fashion is circular, achieving it is not an easy task. The prize, though, is that circular fashion businesses are estimated to grow 18% per annum from where they were at the beginning of this decade to 2030, whereas the rest of the market is looking at just 3% annual growth.”