BoF Masterclass | Fashion’s New Playbook for Online Returns

Created by BoF’s journalists and editors, in conjunction with our wider network of leading fashion creatives, thought-leaders, and innovators, Masterclasses are in-depth webinars with supporting resources, designed to deliver key learning outcomes on critical industry topics.

Watch on demand here:

Background:

Even since Amazon introduced free two-day shipping for Amazon Prime members in 2005, providing shoppers with a free return service has become table stakes for retailers.

But free returns are a major headache for retailers who have to contend with high shipping costs — which have increased since the pandemic — and dedicate precious resources to sorting inbound packages. Today, more brands are revising their returns policies and are turning to startups specialising in processing returns more effectively.

On the latest BoF Professional Masterclass, BoF deputy editor Brian Baskin, and Malique Morris, BoF’s  direct-to-consumer correspondent are joined by Ray Marciano, managing director at Accenture, Anisa Kumar, chief customer officer at returns experience platform Narvar, and Rachel La Rocca, fashion senior director at online marketplace Mercado Libre, to discuss  how businesses of different sizes and functions can manage their return services.

Key Insights:

• Even as the pandemic’s e-commerce boom came to a close in 2022, the rate of returns remained consistent. What’s more, rising inflation and labour costs have made returns more costly for retailers. As more companies prioritise profit over growth, brands are cutting costs where possible and making changes to their returns management practices. “[Retailers] should be thinking of the return moment as a reverse checkout,” said Kumar. “As much as you personalise [for the consumer] on the front-end, [retailers] should know the customer, their intent and what [retailers] should be offering them. It’s a personalised return policy.”
• To manage returns, retailers can discourage impulse shopping and bracketing, the practice of buying one product in a variety of sizes, which leads to more returns. Additionally, retailers can make logistical shifts to slash costs and incentivise customer loyalty to drive sales growth from a subset of consumers less likely to make returns. “It is important to look at returns not only from a cost perspective but from the consumer experience,” said La Rocca. “If you have a customer that is not happy with your return process, the potential revenue downside for this customer is important.”
• Loyal customers are more likely to know their sizes and tastes and less likely to buy products just to return them, according to Morris. “Customer loyalty is bigger than ever as a driver of sales as digital advertising is becoming more expensive,” he said.

Additional Resources:

• BoF Case Study | Fashion’s New Playbook for Online Returns: The e-commerce boom may have cooled but online returns rates remain high, and the costs of processing them are more expensive than ever. BoF unpacks how retailers can reduce the costs of returns and protect profit margins, while improving customers’ shopping experience to generate higher sales.
• How Emerging Consumer Sentiment Should Inform Your Returns Process: E-commerce returns company Happy Returns, a PayPal company, and research firm TRC surveyed over 2,000 US consumers on their evolving shopping habits and attitudes towards online returns to enable merchants to optimise strategies. Discover key insights from the downloadable report here alongside BoF analysis.
• Reimagining the Returns Process to Unlock Growth: BoF sits with Andrew Pease, senior growth director at Happy Returns, and consumer psychologist Kate Nightingale, to hear how companies can transform returns from customer pain point to growth opportunity.