UK online shoppers are ’serial returners’ who send back goods worth £7bn a year, equivalent to a ’phantom economy’ of lost sales for retailers.
So says research carried out by Opinium for Barclaycard that questioned 2,002 UK consumers and 302 retailers to find that 26% of retailers have seen returns rise both in-store and online over the last two years. Fashion retailers are among the worst hit, with almost four in ten (37%) reporting increased levels of returns. The average British shopper spends £313 buying clothes every year – and returns almost half (47%), worth £146. A third (33%) of shoppers buy clothes online expecting they will be unsuitable before they’ve tried them on. Two in five (40%) return clothing bought online because they don’t fit as expected, and 9% have started buying several sizes and returning the ones that don’t fit. That’s a trend that 27% of retailers have seen.
Currently, businesses are adapting through measures including raising their prices to cover the costs of managing and processing returns.
But, says Barclaycard, there’s something that retailers can do about the problem – since sizing issues are the biggest reason given by shoppers for returning their clothes. More than a third (36%) say they want brands to improve their online size guidelines, and 35% looking for sizing to be standardised across retailers. Sixteen per cent would like to see the use of augmented reality and other technologies to help them visualise how products will look on. Shoppers also suggest there’s a need for more photos, videos and online views to help them buy.
The changing behaviour has come as it gets easier to return a product: 52% of shoppers think retailers have made the process easier while 54% of retailers say customers take returns into account when deciding where to shop.
Steps retailers have taken to improve the returns situation include providing more product information (52%), clearer and more transparent returns policies (48%), raising prices to cover the cost of returns (29%), working with logistics providers to speed up returns (28%) and introducing new systems to handle the returned stock that can’t be resold (26%). Other responses have included limiting the options available to customers based on their preferences (26%) and reducing the time customers have to return items (23%). The lowest take up has been of try before you buy services (18%).
Konrad Kelling, managing director of customer solutions at Barclaycard, said: "It’s clear having an effective and convenient returns policy that satisfies customer needs is a crucial factor of success for retailers. While many have adopted new processes to hep manage increasing returns volumes, the real focus should be on measures which help to reduce over-ordering in the first place. Implementing technology such as virtual fitting rooms which allow shoppers to visualise how products will look when worn, for example, is one way retailers could reduce the number of returns and refunds they contend with and, in turn, the size of the ’phantom economy’."
Commenting on the figures, Michal Silas, founder and chief executive of OTTY Sleep, said: “For my business free returns aren’t just a nice-to-have service for customers – they’re an intrinsic part of our product offer. The OTTY mattress comes with a ‘100 night trial’ period, within which the customer can return the product for free and receive a full refund.
“This kind of service is key if companies like ours want to encourage shoppers to make bigger, more expensive purchases online. Having a ‘free returns’ policy in place makes customers a lot more comfortable in making that purchase in the first place, without physically seeing the product first. The proportion of returns we actually receive is very low – less than 10% - but the assurance that the product can be returned if they’re not fully satisfied, builds shoppers’ confidence to buy. In fact, our business is built on that promise.”
And Marc Granditer, managing director at Base, said: “Returns form a very important part of our business at Base. More and more of us are shopping online and we recognise consumers don’t always have the opportunity to ’try on’ as they may do in-store. This is especially true for busy parents buying children’s clothing where speed and convenience can be a deciding factor of whether to make a purchase.
"Consumers expect shopping to be quick and simple and that’s why we offer free returns for our UK shoppers. Not only does this help to foster trust and loyalty but it’s also become a key factor to our success.
"As our online business has grown considerably in the last few years, understandably we have also seen the number of returns we process rise, as is to be expected with an increase in sales. So we work hard with our logistics providers to ensure that the returns process is as seamless as possible.
“We also make sure the information about our returns policy is clearly stated on our website so that customers can be confident they are making an informed purchase, and if items are unsuitable, they can make a return without incurring any additional cost.”