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Return rates are on the rise

By Don-Alvin Adegeest

6 Feb 2022

Retail

Image: Dressipi Returns Rate
Return rates are on the rise and nearing 2019 levels, fuelled by a growth in online shopping. In the UK, e-commerce represents 50-60 percent of revenue for traditional brick and mortar retailers, compared to 30-40 percent for US equivalents. This is massively contributing to an increase in returns, according to the latest figures from Dressipi.

Store closures during the pandemic saw a big overall increase in online shopping but the mix of products shifted to reflect a more casual wardrobe. This change in product mix meant that most retailers had a real cash bonus as return rates dropped by 21 percent.

New figures from Dressipi, show return rates are nearing 2019 levels, with a big shift to a more “return rate heavy” product mix. This product mix change has increased the return rate by 2.17 percent.

Dresses, tops, jeans and bottoms are typically the 3 largest categories for return. Pre-pandemic dresses were 16 percent of the product mix and declined to 11 percent in 2020. Current the category is back to above 2019 levels.

An analysis per product category highlight a move to a more casual wardrobe, reducing the return rate by 1.27 percent.

Figures from Dressipi show return rates for the period from Aug - Oct 2021 vs the same period in 2019 are up 1 percent. The outlook for 2022 will be either inline or approximately 1 percent higher than 2019.

Breaking down returns reasons, most items are returned when style is the issue (52 percent, when the same customer buys multiple options of the same category within the same order, having removed multiple size orders). The second reason is when it is a single size and single category product (33 percent) and lastly when size is the issue (15 percent, when the same customer buys the same product in more than 1 size over any number of orders within a year).

When return rates for any multiple size purchase are at 85 percent, Dressipi’s data suggests that size wasn’t the issue but rather a product issue. During lockdown there was rise in customers buying multiple options (19 percent) but also in customers buying multiple sizes (11 percent) and a decrease in customers buying single size single product (-10 percent).

Article source: Returns data from Dressipi

Dressipi
Return Rates