Temple U. Professor Misty Blessley raises an interesting inventory issue–returns.
Fashion influencers and their followers are contributing to the increase in rising product returns. According to the National Retail Federation, returns accounted for 17% of retailers’ total 2024 sales. Online purchases have a 26% return rate compared to in-store purchases (10%). Many online shoppers intentionally buy items they plan to return. Statista reports that clothing (24%), shoes (16%), and accessories (12%) are the most returned products – the exact product footprint of fashion retailers. Several recent articles shed light on the influencer effect and tips for revamping costly product returns in retail fashion.
Fashion influencers have popularized trends that promote returns behavior:
- Hauls: Influencers showcase purchased fashion items, then decide whether to keep or return them based on follower feedback.
- Wardrobing: Influencers buy items for temporary use such as content creation and return them afterward.
- Bracketing: Influencers buy multiple sizes or colors of a product to find the perfect fit, with the intention of returning the rest. About 58% of consumers buy multiple sizes for this reason, with 75% of returns attributed to fit.
- Influencing: 56% of followers make purchases recommended by an influencer, many of which are later returned.
Returns come with significant costs, including shipping, restocking, reselling at a discount, and administrative expenses. Retailers are adopting strategies to curb or better manage returns:
- Charging return fees: Brands like Zara and H&M now charge for returns.
- Clarifying return policies: Shortened return windows, stricter conditions for full refunds, and more items marked as final serve to narrow return opportunities.
- Improving sizing tools: Enhanced size charts, virtual reality fitting tools, and online fitting rooms help shoppers make better choices.
- Implementing logistics systems: Retailers are investing in digital tools to streamline and manage returns more efficiently.
As discussed in Chapter 1 of your Heizer/Render/Munson textbook, best practice can be achieved when operations and supply chain management, marketing, and finance work together.
Classroom discussion questions:
- After 89% of retailers adjusted their policies to deter returns, 59% saw return rates increase. What factors could explain why these policies fail to get the desired result?
- The SCOR Model, discussed in Chapter 11, outlines attributes for processes like source, make, and deliver. How are the attributes for returns like or different from these processes?
