How Companies Like ASOS Have Mastered This Exhausting Logistical Nightmare
ASOS is a well-known name in the world of fast fashion as a one-stop-shop as it carries more than 850 brands. It is a London-based online retailer, being valued in billions and carries some very well-known brands such as Tommy Hilfiger, Adidas, Aldo, American Eagle, Guess, and many more.
Though ASOS is a frontrunner for managing customer experience and easy returns, they’re not the only company out there that has been able to do so, even in this time of extreme online shopping. How have these companies managed?
Shopping for Clothes Online
When you are shopping online for clothes, they might look good in theory, but off of the model and on your own body, they might not seem exactly as you would have imagined. Another issue that arises is with size. You cannot be sure of how well an item might fit unless you have actually tried it on. What if, after trying it out, you realize that it doesn’t fit in a flattering manner? What use would you have of it then? This is where return policies come in.
What Should Return Policies Entail?
Customers prefer a very generous returns policy, which, if you check the websites of leading global retailers, you’ll see they often allow you an ample 28 days (nearly a month!) so that you may return your items to them for a full refund. If you miss the 28 day return period, it’s common for larger companies to offer a store voucher, gift card, or credit to make up for the money you’ve lost on a product you won’t wear. It is one of its greatest draws for people choosing to shop at ASOS and other leading retailers, especially as people move online. Simply put, it is convenient to shop online, and the more liberal the return policy, the better!
During the 2019 holiday season, 41 billion USD worth of items were returned! That number is astronomical, and many major business return policies favour the customer. However, they have begun to face exploitation, to the point that it can’t even really be called shopping anymore. People come online to rent or borrow basically, already planning to return or exchange it when they’re done with it.
What Becomes of The Products You Return
Almost 30% of online purchases end up being returned, compared to ~8% returns for brick and mortar returns. Returns are enshrined in the laws of many countries such as the UK and the US which ensure that the consumer’s rights are protected. However, return policies are hurting the planet and the company’s bottom line as it is expensive to return products. They must be inspected before they are restocked; if they are restocked at all. Many items simply end up being thrown in landfills, causing undue stress to the environment. Moreover, excess inventory costs the environment £4 billion of landfill waste every year or they may be stored in warehouses. In the UK it is estimated that £140 million of clothing goes into landfill each year.
According to CNBC, the return industry has caused a boom in the warehouse industry. In fact, the retail industry is the top user of warehouse space in the US, accounting for 700 million square feet nationally! The increase in return items puts a lot of stress on the warehouse employees who must process these items. The working conditions in warehouses have recently come under scrutiny for being gruelling, for which the employees are inadequately compensated.
The Basics of Return Fraud
Return fraud is an e-commerce scam that is committed when a person purchases an item from an online retail store without even wanting to use it. It is a common occurrence that annually causes US retailers a loss of several tens of billions of USD per year. In the fiscal year of 2019, retail fraud cost US retailers a loss of 27 billion USD, up 35% over 2018. Consumers return goods that may be used, damaged, or even stolen. All the negative impacts of returning goods will only increase in the coming years
How Major Retailers Prevent Return Fraud
To counter any economic loss and environmental cost, many retailers have changed their policies to make people think twice before casually buying and returning items and keep them from exploiting return policies. Some companies have started charging return and restocking fees, and ASOS has been a leader in doing so. By changing their return policy so that customers who return items frequently can no longer do so, they’re cutting down on losses.
Runtastic Case Study
A great example of Digital Genius dealing with returns and refunds is Runtastic. Runtastic has over 30 million registered users and pushes sports through gamification. After implementation – we fully resolved 80% of cancellation and refunds as well as saving 7 minutes per ticket handled. You can find more details about our work with Runtastic here.
It seems that the “We’ll take anything, anytime” return policy is on its way out. This might be good news for the environment, the overburdened customers, and even the consumers who won’t have to add any of their items to the cart only to find out it is out of stock (another issue caused by people ordering freely knowing they can just return it without any worry). Fast fashion may be cheap, something you may not have to put much thought into, but new research shows that being conscious consumers might be better all around.
To see how DigitalGenius can support your business manage Returns & Cancellations book a demo with us today