On the face of it, the offer of free postage (and particularly of free returns) on e-commerce fashion has got to be a win-win service. Consumers are given the freedom to purchase their choice of apparel without too much worry about what they are getting themselves into, meaning that the retailer benefits from a quick and easy sale. This is particularly helpful for online retail, as it relies on the customer buying items based on trust.
Yet arguably, for customers, ‘free’ postage has led to increased costs, disappointing fit, frustration, time wastage, and harm to the environment. And for the retailer: damaged margins, havoc caused to the inventory, and stunted innovation. Free postage has become a trap from which many brands cannot break free without risking market share. It is right up there with the ‘free plastic carrier bag’ as one of retail’s big, bad ideas.
Free postage is allowing consumers to buy product which is likely to be returned, at no apparent financial penalty, contributing to a situation where retailers are battling a huge and ever-growing returns problem. Statista , for instance, estimates that in the US alone, returns costs will amount to $550 billion in 2020 – that’s 75.2% more than in 2018. If we allow this to happen, that would be a lot of money draining out of any industry and, of course, it all has to come from somewhere. Once a brand has cut its margins down to the bone, the slack is taken up by the consumer. So much for it being free!
One well acknowledged downside of free postage – and a favourite journalistic obsession – is returns caused by customers abusing the system, either by buying items always doomed to be returned (caused by chronic dithering or ‘buyers’ remorse’), or worse, wearing and returning apparel: so-called ‘wardrobing’. Some people may indeed be overly click-happy, and it’s also clear that there is a problem with individuals who use their retailer’s website as if it were their personal wardrobe, wearing, then returning stock – all for free. Retailers are beginning to grasp the nettle to deter this expensive behaviour; ASOS, for example, has recently caused a ripple in the news cycle by sending out an email to its customers warning: “If we notice an unusual pattern of returns activity: e.g. we suspect someone is actually wearing their purchases and then returning them or ordering and returning loads …then we might have to deactivate the account.”
And ASOS is not alone: research from Barclaycard has revealed that 20% of retailers said they had made their returns policies more stringent in the past year, with a further 19% of retailers saying they plan to do so in the next year.
That free deliveries encourage this kind of detrimental customer behaviour (which, by the way, pre-dates the internet, when bricks and mortar stores were not immune from what is -and always has been – an irritating minority activity) is undeniable, but whether punishing it actually makes a statistically significant impact on the overall level of returns is a moot point. One would have to be convinced that it is rife. Most likely, the real cause of most failed sales is not widespread and overwhelming consumer culpability, negligence or ineptitude; it’s more probable to be an endemic industry problem: about 70% of all returns are actually reported as an issue with fit, and such a high statistic speaks for itself.
If (just for the sake of argument) free delivery were banned, and, instead, all consumers were openly billed for the real cost of any return (postage [both ways] as well as all other costs like issues caused by the disruption of the inventory, credit costs, administration, picking and re-stocking, stock shrinkage, and packaging – not to mention a ‘green tax’ for damage to the environment), the hefty charge would mean a great disincentive for customers to buy product unless they were really sure that it was suitable.
Of course, this situation could only happen if all brands adopted the same methods. Many retailers simply would not be able to stand up to their competition if they had to go it alone. It’s why the industry has become ‘addicted’ to free postage. The pressure against retailers being the ‘first one to blink’ is immense, and many brands would not be able to afford to hand their rivals such a competitive advantage on a plate. But, hypothetically, if this method were employed throughout the sector, there would be a huge downward pressure on returns: every brand, retailer, manufacturer, investor, politician, consumer, journalist, and anyone interested in protecting the environment would put the subject under the microscope in a national debate. And, inevitably, that microscope would focus in on the number one reason for apparel returns: fit.
Overnight, those brands who still don’t use any technology to establish the fit of their consumer at point of sale or, worse, aren’t even developing a fit strategy, would be placed under scrutiny. Consumers will realise that they have the right to expect a much better system of fitting them effectively, as it is they who pay for any failures.
So far, so hypothetical. Back in the real world, the high cost of deliveries and returns are spread equally around all consumers: those who do and those don’t frequently return items, and the cost is concealed under the banner, ‘free’. Few consumers really understand the downside of this expensive habit. But at last, things are changing. The fashion industry consumes more energy than the aviation and shipping industry combined, and the damage to fashion’s carbon footprint by all this extra transport and other wastage is weighing heavily. It’s likely that in the future, pressure from a population who is becoming more informed about these issues will come to bear on the industry.
In order to tackle e-commerce’s fit problems, it’s vital to engage the consumers’ co-operation. It is their participation that is necessary to make any ‘fit tech’ at point of sale work, and it is their accurate data that is needed to develop the new sizing and grading strategies necessary to better suit their needs. Yet, with free postage, there is very little leverage that can be brought to bear on consumers to use a fit tool at all.
My research with plus size female subjects (the cohort that suffers worst with fit problems) shows that few of them engage sufficiently with the available fit technology. We don’t know how much more effective today’s fit tools would be if they had the benefit of higher participation levels (it’s likely to be ‘very’); we don’t know what, if anything, those who do use fit tools have in common (they are a self-selected group, and are likely to share certain characteristics); we simply do not know what we do not know. Without the penalty of paying for deliveries, consumers do not presently have enough incentive to bother interfacing properly with that tech, meaning that the efficacy of the tools are diminished, and some brands are not taking them seriously enough, or are kicking them into the future.
Radical as it sounds, there is a highly convincing argument that free postage, where it is offered at all, should be done so only on the condition that the consumer genuinely engages with fit tech provided by the retailer. If this happened, it is likely that the technology would immediately take a giant leap forward. Today’s fit tools are effective, and some such solution should always be deployed, but the ‘nudging’ of all clients to use the fit technology offered to them as a matter of course (using genuine ‘input’ data) would be of tremendous benefit to a range of developers, giving them access to the information needed to exponentially advance tomorrow’s fit solutions, starting at the point of sale, with benefits all the way through to a much improved sizing and grading offer.
So, contradictory as it seems, free postage doesn’t have to be a damaging proposition: it could, in fact, be a very powerful tool for good if deployed creatively. Indeed, it seems incredible that the fashion industry actually has at its fingertips such an effective way to persuade customers to use the fit tech each time they buy – and yet they are not using it for this purpose. Far from the fashion industry coming together to use postage charges as a precious tool to effect change, it is being squandered in the cause of internal struggles over market share.
Free plastic carrier bags were dispensed with as a result of changing social attitudes, which ultimately resulted in legislation. As things stand, it’s only a matter of time before informed citizens turn their attention to free postage and see not a win-win service to the customer, but another one of fashion’s big, bad ideas.
