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Reducing Apparel and Footwear Returns with AI-Powered Sizing Solutions - Prime AI

Published on April 26th, 2024

The fashion industry is challenged with excessive product returns, especially for online purchases. According to the European Environment Agency (EEA), "The return rate for products sold online is up to three times higher than for products sold in physical stores". High return rates not only strain retailers' profits, but also contribute to excessive waste and environmental damage. EEA estimates that 22-43%, or on average one third of all returned clothing bought online, ends up being destroyed. Between 264,000 - 594,000 tonnes (22,000 and 50,000 shipping containers) of textiles are destroyed in Europe each year.


The Sizing Dilemma

One of the primary culprits behind high apparel return rates is sizing inconsistencies across brands and the inability to try on items before purchasing online. Around 70% of returns in fashion and footwear retail are due to size and fit issues. Fortunately, innovative AI-powered solutions like Prime AI's Apparel Size Finder and Shoe Size Finder are tackling this issue head-on.

By offering personalised size recommendations and locating nearby stores with desired inventory, Shoe Size Finder enhances the shopping experience, boosts conversion rates, and cuts refunds for footwear retailers. Please read our case study on Nike footwear successful refund reduction.

EEA reports from “According to a large online European retailer, for items for which they offer size advice — using size indications and size recommendations — size-related returns have fallen by 10% compared to items that did not have size advice” read more

Prime AI case studies read more

While AI-powered sizing solutions address a significant pain point, a clear strategy is necessary to comprehensively reduce return rates, Prime AI is here to help you.

Here are some additional strategies that Prime AI can advise and help retailers to implement:

Incentivise Keeping Items

  • Offer store credit worth more than the original purchase price.
  • Provide discount codes, loyalty points or credit worth of shipping costs for future purchases if Prime AI/s size and fit finder tools are used and item is kept.
  • Implement Restocking Fees. Charging restocking fees, even a small percentage of the purchase price, can discourage customers from returning items unnecessarily. This fee helps offset the costs associated with processing and restocking returned merchandise.

Behaviour Tracking

By analysing customer data and return patterns, retailers can identify frequent returners or "bracketing" behaviour (ordering multiple sizes/colours with the intent to return most). This information can be used to:

  • Flag potential bracketing orders at Product Detail Page and Checkout for additional verification. Prime AI can help you implement this strategy.
  • Limit return privileges or offer incentives for frequent returners to keep items. After analysing your customer database you may find that 30% of customers are responsible for 80% of your refunds. Also you may find a cluster of customers driving a negative margin for your business. In other words, considering shipping, return, restocking costs of the merchandise make up a greater amount and the margin you keep from the items they kept. These are profit “vampires” and you should clamp down on these customers’ behaviour. Prime AI is here to help.
  • Gain insights into common return reasons to improve product descriptions, sizing guidance, and product design. Prime AI can advise you how to collect refund reasons depending on the problem you are having. We have an avatar to mark and even order or how you ask questions about refunds can have a difference in statistics. Just to highlight again, refunds reduction requires a strategic approach, is your priority to increase conversion or shrink the size of 70% returned products due to “fit, size, or unethical behaviour of some”.

A Sustainable Solution

Implementing AI-powered sizing solutions and strategic return policies not only benefits retailers' bottom line but also contributes to sustainability efforts by minimising the environmental impact of excessive returns and unsold inventory. As highlighted in the European Environment Agency report, the destruction of returned and unsold textiles is a pressing issue in the circular economy. It can be estimated that 4-9% of all textile products put on the market are destroyed without ever being used for their intended purpose.

By empowering customers to make informed purchasing decisions and reducing the need for returns, retailers can decrease their carbon footprint and promote a more sustainable fashion industry.

Apparel retailers seeking to enhance customer satisfaction, increase profitability, and embrace eco-friendly practices should strongly consider implementing AI-powered sizing solutions like Prime AI's Apparel Size Finder and Shoe Size Finder and adopting strategic return policies with Prime AI will reduce your refunds.

About Company

Prime AI offers customised artificial intelligence solutions to the fashion retail industry and a wide range of industries and applications. With its ground breaking technology, the company is committed to revolutionizing the eCommerce industry by making it more efficient, cost-effective, and accessible to all.

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