The key points
- For omnichannel retailers, charging for online returns is a winning bet to generate more store traffic and additional spending.
- With profitability under pressure, more pure-players are expecting fees for returns by 2023
- Charging for returns to the customer means offering a higher quality and range of services
- Increasing the average basket for free shipping on e-commerce orders is an alternative to charging for returns
In the fashion sector, introducing paid e-commerce returns is a necessity for some players since the Covid-19 pandemic. “For France and the U.K. with respectively 21% and 33% of fashion sales online in 2021, return rates were around “20% to 30% before Covid-19. Germany was already around 50% due to the historical mail order culture”, explains Cédric Rossi, Analyst at Bryan, Garnier & Co. Today, German returns have slightly increased but exploded in France and in the U.K., increasing by up to 15 points compared to 2019.” This policy change happens as online fashion sales, for the first time, slowed down in 2022 (that was the case for Boohoo and Asos).
This increase in returns is also linked to a change in category mix. “In 2020 and 2021, shoppers were more focused on buying comfortable clothes, but since last year, with the re-opening of larger social events, brands such as Hugo Boss recorded fairly strong growth in evening dresses and suits,” continued Cédric Rossi. However, this type of item is much more sensitive to size and fit, which are the main reasons for returns, compared to jogging suits or sweaters.