Zero clothing returns: The future of retail or just a fairytale?


This is a sponsored article written by Helen Merriott, partner and retail and consumer products leader of UK & Ireland at EY. In the piece, Merriott talks about how technology can disrupt the retail industry.

The retail industry has increasingly been disrupted in recent years.

Demand for a truly omni-channel shopping experience requires far greater inventory visibility and supply chain flexibility.

Retailers are aware they need to adapt to survive this shifting landscape. In a recent global EY survey of senior retail executives, 77% feel they can no longer reliably sustain profitable growth, and a striking 81% said that they need to be bolder with their operating models.

Is it a sale until your customers keep it?

Against this backdrop, most retailers have come to appreciate that creating a good return experience offers competitive advantage. Encouraged by these flexible return policies, customers are now returning goods in record numbers.

Our recent UK research into returns and digital technology in retail highlights that 30% of what is bought online is returned and, as the proportion of online purchases increases, so will the cost of returns. Returns cost UK retailers £60bn a year, £20bn of which is generated by items bought over the internet, creating a significant challenge for retailers.

How does your returns policy affect buying behaviour and loyalty?

We conducted an online survey of 1,000 UK shoppers to understand customer behaviour in returning clothes and shoes bought online; we also tested attitudes towards technology solutions intended to reduce the need to return items.

Survey responses showed that returns are creating a significant challenge for retailers and that customers return a significant percentage of clothes purchased online due to sizing and fit:

The majority of online clothes shoppers also want convenience of delivery and returns; they want cheap and easy delivery and do not want to be penalised or charged for returning goods. They don’t, however, want to be bothered with the hassle of returns and would buy more online if they were more confident of fit and knew that the retailer had used leading technology to improve the likelihood of the right fit first time.

Keeping your stock sold: could tech disruption be both the kill and the cure?

Within 10 years we expect that the clothing supply chain will be integrated, lean and supported by rich digital technologies, which allow people to focus on creativity in design, make and delivery of experiences to their loyal customers wherever they may be.

This will require digital support for supplier collaboration, 3D CAD patterns, analytics which model fabric behaviour, body scanning technologies and immersive online and physical store “try-on” avatar experiences; all of this at scale, affordable and fully integrated.  Sounds like a fairytale, doesn’t it?

We studied the market and assessed over 25 startups which are developing solutions that can help retailers reduce the cost of returns and address issues across the value chain. While there is no single end-to-end solution which dominates, the technology is available today and we predict that within 10 years will be mainstream.

To find out more about the way in which technology can disrupt the technology industry watch UKTN’s latest interview with Helen Merriott.