British Fashion Council commissions report to help solve e-commerce returns problem
The British Fashion Council (BFC) has commissioned global strategists Roland Berger, in partnership with DHL, to carry out a report to help solve the problem of increasing e-commerce returns in fashion.
Part of the BFC's Institute of Positive Fashion (IPF), which drive's the council's commitment to climate action, the initial findings of the report will be released by the end of this year.
Roland Berger head of UK retail and consumer goods division Siobhan Gehin said increasing returns will cost the British fashion industry £7 billion this year.
“With online fashion expected to overtake bricks and mortar sales by 2024, returns present a serious challenge for the sector,” Gehin said. “Every third item purchased online in the UK is returned, so this will cost the British fashion industry at least £7bn this year. Finding ways to keep value in the business and divert returns from landfill is essential.”
About 3% of returns cannot be resold and often end up in landfill and needless CO2 emissions are also generated, mainly through reverse logistics. According to Roland Berger, there are also “hidden” costs, such as the 10%, the strategist attributes to the approval of returns that are fraudulent (for example 'wardrobing' – buying with the intent to return after one wear).
Through the IPF, the BFC is working on a 10-year strategy to enable the industry to reduce climate and societal impact in line with UN goals and UK Government commitments. The strategy will comprise adaptation of business models and working practices across the whole industry.
BFC CEO Caroline Rush said: “We are delighted to work with Roland Berger to help find a solution to the direct and hidden costs and impact associated with returns in the UK. This project recognises the importance of investing in innovation to secure robust and profitable businesses, while safeguarding the planet and society.”
A number of big names in fashion have implemented a charge for e-commerce returns in a bid to tackle the problem. Global giant Zara is now charging £1.95 for e-commerce returns, though returns to store are free, and online fast fashion business Boohoo has also introduced a £1.99 returns charge.
Read our recent feature, 'E-commerce: have we reached the point of diminishing returns?'