“A lot of businesses will send returns to a warehouse because the effort and time that goes into unpacking, repacking, checking the item, and then having to put it back to a fulfillment center is a huge amount of hassle,” says Lone Design Club’s Morter. Every brand the boutique works with also has different rules around receiving returns, complicating logistics.
For retailers working in e-commerce, the cost of delivery is factored into the price of the item, and can account for as much as 10 per cent of the retail price, according to Stord. However, the cost of handling the return of an item, with labor and storage factored in, comes to 66 per cent of the original price. “When you start calculating that, you see why more and more brands say ‘Why don’t you keep that item, or destroy it, or show us proof that you donated it, and we’ll provide you a credit because actually processing it back in is very inefficient, ”says Henry.
In worst-case scenarios, returned items can’t be resold. “I’ve seen as many as 50 per cent or 60 per cent of goods are not re-sellable. Which gives me a heart attack, personally, ”says Nikki Baird, a vice president at retail management software company Aptos.
“A lot of businesses won’t even bother restocking an item. They’ll bin it, ”says Lone Design Club’s Morter.
Looking for solutions
For Henry, the first solution is to raise customer awareness so that they act with intention and understand what they are doing when they make a purchase.
Retailers are investing in intervening pre-purchase to discourage bracketing. Truefit works with retailers to integrate with their checkout processes and steer customers towards sizes that cross over between brands, using specific labels that the consumer relates to already as a point of reference. For multi-brand retailers Truefit claims to have reduced returns from bracketing by 24 per cent, and with single brand retailers this reduction is by as much as 50 per cent.
Luxury brands have the capacity to go further, bringing in associates that can form a personal relationship with the customer, offering assurances of the brand’s capacity to find the right fit without over-ordering, says Baird.
Lone Design Club’s solution stands somewhere between the point-of-sale intervention of Truefit and the individual relationships that major brands have encouraged with customers. Pop-up messages from the customer service team are used to carry the message that Lone Design Club are concerned with sustainable consumption and environmental impact and would prefer to get the order right rather than see excess waste and drive further environmental damage.