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Solving fashion's product returns: Solution-focused report on impact of fashion returns

By Press Club


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Image Credit: British Fashion Council

The British Fashion Council’s (BFC) Institute of Positive Fashion (IPF), DHL and Roland Berger today launch a new report on the environmental impact of returns in the fashion industry, with a suggested framework of recommendations.

This research comes at a critical time, as the returns process in the UK generated 750,000 tonnes of CO₂ emissions in 2022 and some 23 million garments sent to landfill or incinerated. This represents 75% of the approx 3% of all returns that can not be resold.

Survey findings:

As part of the report, a consumer survey was conducted by the IPF, Roland Berger, and Dynata to better understand UK consumers’ online fashion purchasing and returns behaviour. The survey highlighted a number of key points, including the following:

  • Incorrect sizing or fit (93%) and product quality not meeting expectations (81%) were the top returns reasons
  • For 56% of shoppers, a returns charge is the measure most likely to prevent returns Key suggestions:

The report presents two target outcomes to reach the target state of minimised returns:

Product returns are mitigated at the point of sale:

Ultimately, the report found that the onus is on retailers to help consumers make the right choice, the first time, every time. Fashion businesses need to be more thoughtful about the products they are selling so that they are producing collections customers will want to keep. They should also be enabling shoppers to buy correctly by leveraging data and digital solutions.

Investment in sizing calculators will become an industry norm and digital avatars an integral part of the future for fashion retailers. Roland Berger has calculated that large retailers with approximately 70% of sales coming from their website, could reduce cost of returns handling by 20-40% with the introduction of sizing calculators and avatars.

The report suggests that free returns will become a thing of the past. Using an environmental message to prevent consumers returning goods currently holds no sway; some 56% of online shoppers surveyed indicated a returns charge or levy as the measure most likely to prevent them returning goods. The trade-off could be losing customers – but as more companies adopt charges it will become an industry norm.

Product returns are handled more efficiently

Retailers need to look closely at reverse logistics to reduce costs and meet CO₂ emission targets. This involves investing into technologies and processes such as digital product passports and automated warehousing, so that businesses can make returns operations more efficient, cost-effective, and less carbon intensive.

The report presents findings from Phase 2 of the IPF’s inaugural Circular Fashion Ecosystem (CFE) Project, based on research conducted from April to November 2022. Explore Phase 1 of the research here. Purchase tickets to the IPF Forum, an annual, actions-based conference which brings together designers, brands, investors, innovators, academia, economists, consultants and disruptors, on the BFC website.

Caroline Rush, BFC Chief Executive, said: “This project recognises the importance of investing in innovation to secure robust and profitable businesses, while safeguarding the planet and society. The responsibility now lies with retailers and fashion businesses to reach the target state by implementing the necessary change across their entire businesses from production to reverse logistics.”

Siobhan Gehin, Roland Berger Senior Partner, said: “Tackling the returns issue is being prompted by lower consumption, impending legislation and higher operating costs – the latter probably being the strongest motivator for companies to move from a linear to a circular business model. While the future for fashion is circular, achieving it is not an easy task. The prize, though, is that circular fashion businesses are estimated to grow 18% per annum from where they were at the beginning of this decade to 2030, whereas the rest of the market is looking at just 3% annual growth.”

Read more about the British Fashion Council here.