Online fashion returns, your stock in the cloud

Hi ...... (fill in the blanks with your name)

Before diving deeper in what's that about your stock in the cloud, let's start with some pretty obvious data:

30% returns rate in online fashion. Reaching even 50% in markets such as Germany.

We can focus on why people are returning clothes, how we can stop it, and if it is worth it to let free returns policies in the past... but today we want to look to the insides of a return.

Today we want to talk about the garment itself.

We want to talk about that poor little t-shirt that is no longer wanted.

The return itself

Let's be honest for once. Returns have always existed, they were there even before e-commerce. So, why it seems that just now are they so harmful to your business?

Let's rewind a bit. When we only had #retail returns used to come back directly into your shop. The customer itself was in charge of the transport, the shop manager did immediate quality control to see if the customer was entitled to an exchange, and most of the time they got a voucher to spend in the shop:

1. You got the product in max 15 days back to its shelf to find a new owner.
2. You got almost 0 costs
3. The customer was happy (or pretty happy) and he/she was back in your shop with the chance to see something else to fall in love with.

The online returns

If you could have returns in a shop where customers had a fitting room so, problems with sizes were the least of your problems, what happens with e-commerce where consumers can buy from anywhere but can't touch or try on garments?

52% of returns are due to sizes too small / too big as per a Shopify report.

Numbers are great. But let's think again about this little poor t-shirt:

1. The customer chooses it for a look, in an impulse, and just fell in love with it
2. The order gets to your e-commerce, and the warehouse prepares the package and sends it.
3. The customer waits, true that nowadays is not much, but they have to wait for it anyway
4. After receiving/picking it up they try it on and ups, a) it doesn't fit; b) they don't like to color, c) they are serial returners who bought different sizes to try them on and will definitely lead to a return.
5. Wow effect is over, they are not that happy anymore (unless they are serial) and have to check the returns policy
6. Once checked, they might even contact your customer service to make sure they got it right
7. They prepare the parcel
8. They send it back
9. You receive it, you need to check if everything is ok and prepare the product to be sold again
10. Back to step 1

3 steps in retail against 10 in e-commerce.

Your stock in the cloud

I am sorry to tell you that part of your stock is in the cloud.

Even if you are super fast and your customer is too, you will need at least a couple of weeks to have the poor little t-shirt back in your warehouse. At this time it won't be available in your eCommerce and many things can come up such as:

• The season changed so you can't sell it at full price anymore
• All other items are sold so you get to have one unit in one size

Transport costs are a great part of the deal and you can "avoid" them by changing your policies as H&M , Inditex集团 or UNIQLO did. But still, you will have part of your stock in the cloud as if the garment just doesn't fit, your customer won't keep it.

But what happens with smaller brands that can't afford to risk their conversion rates?

Not to mention the huge #carbonprint and tons of plastics and packages used to send the products back and forth.

We agree that we don't like online returns. And it is also true that we have to find a way to coexist with them in a reasonable way.

Some months ago, we prepared a small report on what Returns mean for a fashion eCommerce and how you can try to reduce them.

No email is required, we just want to share with you for real what we prepared. If you are not a Spanish speaker no worries, DM us and we will make our best to translate it and share with you an English version ?

Will speak more about returns, for sure but we wanted to share the idea about Stock in the cloud to open a debate and see your opinion on that!

Wish you a Naiz Weekend!