IMPERFECT FIT AND THE $100 BILLION COST OF RETURNS - JAnuary 2018 HOW FITS ME SOLVES THE CHALLENGE OF FIT IN THE DIGITAL MARKETPLACE - Fits.me
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JAnuary 2018 IMPERFECT FIT AND THE $100 BILLION COST OF RETURNS HOW FITS ME SOLVES THE CHALLENGE OF FIT IN THE DIGITAL MARKETPLACE
EXECUTIVE SUMMARY
ONLINE SALES WITHIN THE FASHION INDUSTRY ARE DRIVEN BY
CONSUMERS WHO EXPECT THE RIGHT THING, FOR THE RIGHT PRICE
AND AT THE RIGHT TIME (USUALLY MEANING NEXT DAY DELIVERY).
THIS NATURALLY COMES WITH ITS OWN CHALLENGES AROUND SIZE,
FIT AND STYLE PREFERENCE.
Returns are a huge expense for online retailers Removing the physical store element naturally
in the U.S. costing a total of $107 billion lost in reduces the level of contact between the
returns a year(1). In 2015, shoppers in the US shopper and retailer. An increase in the number
returned 30% of all apparel and footwear items of purchases made online can also reduce the
purchased online, with a small number of understanding retail businesses have of their
logistic firms handling the majority of these customers and the differences between various
returns(2). While a recent survey suggests that a consumer groups as they become more abstract
positive returns experience can attract new – for some they are simply cookie IDs on a
customers(3), the process is a waste of resources computer system.
which reduces retailers’ bottom line, incurs
significant environmental costs(4) and
undermines the hard earned goodwill and
trust of customers.
CONNECTING THE DOTS
This report draws on qualitative research 88% OF CONSUMERS
conducted by Fits Me in 2016; as more REPORT A FEELING OF
shoppers increase how frequently they shop FRUSTRATION WITH
online, they also develop distinct behaviours REGARDS TO SIZING
as they would in a physical retail space. INCONSISTENCY.
Understanding what these are can provide
retailers with valuable information that
will help them keep shoppers happier. BOTH MEN AND WOMEN
HAVE DEVELOPED FIT
Online apparel, footwear and accessories PSYCHOLOGIES; MEN WANT
expenditures are forecast to grow by 39% over the AN EFFICIENT, STREAMLINED
next 4 years to reach $96.41 in 2020(5). Fits Me expect EXPERIENCE, WHILST
that getting fit right will become more important WOMEN PREFER TO AVOID
than ever, making this paper essential reading for THE COMPLEX ISSUE OF SIZE.
anyone with a stake in the fashion industry.
1
Internet Retailers, December 31st 2016 & Statista.com https://www.statista.com/statistics/272391/us-retail-e-commerce-sales-forecast/.
2
Internet retailer, https://www.internetretailer.com/2015/12/31/ringing-new-year-rush-online-returns. 3 Endicia http://www.endicia.com/
landing-pages/return-to-sender-infographic. 4 J. Edwards CARBON IMPLICATIONS OF RETURNING UNWANTED GOODS ORDERED ONLINE
5
https://www.statista.com/statistics/278890/us-apparel-and-accessories-retail-e-commerce-revenue/
THE DIGITAL CHALLENGE FOR FASHION Retail fashion is the fastest growing e-commerce undermined the hard earned good will and sector in a digital world where half of all trust of their customers. purchases are now made online. As the most popular e-commerce category, the U.S. has It’s a wake up call. To ensure future success, witnessed a 11% increase in online sales of fashion retailers must make sizing in the online apparel and accessories in the past year alone(6). world easier for their customers to translate. Yet serious obstacles threaten further growth; Fash-tech (tech start-ups that are focused one of these being the ongoing issue within on the fashion world) needs to answer the sizing. The legacy of traditional sizing has led challenge that has followed the industry since to an ever increasing $62.4 billion mountain the birth of e-commerce: the problem of fit. of returned apparel and footwear purchased online. While a recent survey suggests that a positive returns experience can attract new Online apparel, footwear and customers(7), the process is a waste of resource accessories expenditures are forecast which has reduced retailers’ bottom line, to grow by 39% over the next 4 incurred significant environmental costs(8) and years to reach $96.41 in 2020(9). 6 statista.com https://www.statista.com/statistics/278890/us-apparel-and-accessories-retail-e-commerce-revenue/ 7 Endicia http://www.endicia.com/landing-page/return-to-sender-infographic 8 J.Edwards CARBON IMPLICATION OF RETURNING UNWANTED GOODS ORDERED ONLINE | 9 Verdict retail press centre, 2015
THE PROBLEM WITH SIZE 54%
52%
50%
WITH SO MANY ITEMS AVAILABLE ONLINE, THERE IS CLEARLY A RISK
THAT 26%
SHOPPERS WILL FIND IT HARD TO FIND THE GARMENT FOR
24%
WHICH
21% THEY ARE LOOKING. HOW PREVALENT IS THE ISSUE?
18%
15%
12%
54%
52%
% 5% 6% Did you find it annoying or irritating5% 50%
3% 2%
to have to search through a lot of
ALWAYS
clothes to
OFTEN
find the items
SOMETIMES
you want?NEVER
OCCASIONALLY
Total - 2005 Male - 940 Female - 1065
26%
24%
21%
18%
15%
12%
6% 5% 6% 5%
3% 2%
ALWAYS 78% OFTEN 79%SOMETIMES OCCASIONALLY
78% NEVER
Total - 2005 Male - 940 Female - 1065
Shopping for clothes can be a gamble. Sizes four in five preferring retailers to only show
vary widely across brands, making the customer items that fit, there is increasing pressure for a
waste time and effort searching for fit rather ‘fit filter’ to help consumers(10).
than being able to choose purely on style.
Additionally, almost half of online consumers It’s clear this failure to communicate fit through
feel annoyed by the amount of clothes they ‘size’ undermines the retailer’s ability to
have to filter out before finding what they want. answer the basic question behind any apparel
19%
18%
purchase: will it fit?
16%
The problem originates with the antiquated
system of ‘size’. Developed in the 1940s when 4% 5%
3%brand
If a clothing retailer or
the American National Institute of Standards showed you only items that it
and Technology used US Airforce women TOTALto - 2005 MALE - 940
knew FEMALE - 1065
would fit you the way you
produce a series of universal measurements, like, would that help you choose?
its rigid definitions have been problematic
from inception. Yes No Unsure
78% 79% 78%
These measurements, based on a primarily
young, healthy demographic, were eventually
abandoned by the US Department of
Commerce in 1983. As brands evolved they
were replaced by more flexible measurements,
designed to suit the needs of different
demographics in a more fragmented market.
Still the concept of ‘size’ remains. Metrics
S, M, L, continue to hold iconic meaning for 18%
16%
19%
the customer as a way to determine fit and
provide symbolic reassurance (or not). With 4% 5%
3%
88% of respondents in a recent Fits Me survey
frustrated by sizing inconsistency and almost TOTAL - 2005 MALE - 940 FEMALE - 1065
10 Fits Me qualitative research Feb 2016
Yes No UnsureGENDER: DIFFERENT ATTITUDES, SAME PROBLEM The issue of fit is a universal one, but it affects In the qualitative study it was clear that distinct men and women(11) in clearly differentiated ‘fit psychologies’ have developed for both men ways. Fits Me sets out to explore the attitudes and women . However, while their core needs and behaviour of both males and females, were different, both groups felt current digital younger and older, towards online clothes offerings exasperated the frustrations they shopping. Their experiences helped Fits Me experienced when buying fashion through develop a radical new approach. e-commerce portals. Fits Me qualitative research Feb 2016 11
WOMEN MEN
“I DON’T LIKE SHOPPING WITH NEW “I CAN’T IMAGINE BUYING A JACKET
BRANDS BECAUSE IT TAKES TIME TO ONLINE. YOU NEED TO TRY IT ON
ANALYSE THEIR SIZING CHARTS TO TO MAKE SURE IT FITS.”
MAKE SURE THAT THE ITEM I FANCY
WILL FIT.”
“THE WHOLE THING’S TOO
COMPLICATED. THERE’S JUST TOO
“I’M AN 8 IN M&S BUT A 12 AT ZARA. MANY BRANDS - I USUALLY STICK
YOU CAN’T TRUST THE NUMBERS TO WHAT I KNOW.”
WHEN YOU SHOP ONLINE.”
“YOU HAVE TO ORDER A COUPLE OF
SIZES TO GET THE ONE YOU WANT.”WOMEN: THE NUMBER GAME
For women, clarity and support is key. Fit is a ‘the number game’ – when a consumer discovers
complex, multi-dimensional issue for this group, they are a 6 in one store and a 10 in another –
with body size likely to change with age or after that the digital shopping experience becomes
childbirth. This evolution can create anxiety and a frustration.
confusion as women move from one life cycle
to the next. Brands that lessen the confusion The industry’s answer has been to offer free
around size, and support women during the returns. While women are generally content with
online shopping experience will inevitably win this system, it has created substantial logistic
their loyalty. and financial costs for the retailer. There is also
a reputational penalty, with 85% of women
Women, young and old, are comfortable with reporting disappointment when clothes don’t fit.
digital commerce. Older women especially
enjoy the privacy afforded to them by digital A wrong guess, a returned item, a lost customer
commerce, seeing it as an opportunity to – digital retailers ignore fit at their peril.
‘shop in peace’. It is only when confronted by
DOESN’T HAVE A JEANS NEED TO SHE KNOWS WHAT LIKES HER SMART
DEGREE IN CLOTHES BE A RELAXED FIT SHE WANTS; IF FIT CLOTHES TO FIT.
SIZING AND DOESN’T BECAUSE HER BECOMES A GUESS-
WANT ONE. SHE BUYS WORLD IS ABOUT ING GAME SHE’LL
BRANDS THAT MAKE MULTI-TASKING. WALK AWAY.
HER LIFE EASIER.MEN: THE NEED FOR SPEED
For men, efficiency is king. They apply a more purchase wardrobe staples unless confident
systematic approach to shopping, honing in they will fit. This creates an additional and
on what they need, and want a streamlined unwelcome time barrier for men as
experience to reduce their time and effort. they trawl through sites, searching
for ‘what they know’.
Counter-intuitively, this makes men wary of
online fashion. The combined risk of a poor Both sexes experience disappointment when
fit and time wasted returning an item works shopping digitally for fashion, albeit for different
against their ‘need for speed’ in any shopping reasons. Women need the digital world to
experience. Digital retail also risks sabotaging talk to them, not to the numbers. Men need a
just-in-time purchases, where men buy clothes streamlined offering, taking them to what they
they need to wear almost immediately. need in the shortest possible time. However,
both groups are driven by a single driving force:
Worse, online retailers present men with an
the psychology of fit.
encyclopaedic choice of apparel. This is often
irrelevant to the male buyer who will not
IT’S PARTY TIME AND LIKES T-SHIRTS THAT NEVER BROWSES, HATES A BAD FIT AND
HE NEEDS CASUALS FIT BUT NEVER TOO JUST HUNTS DOWN IS AFRAID TO EXPER-
THAT DO THE JOB. TIGHT. THE CLOTHES HE IMENT OUTSIDE THE
NEEDS. BRANDS HE KNOWS.OVERWHELMING RETURNS
These unresolved problems for the consumer Fashion retailer ASOS Chief Executive Nick
have created serious issues for the fashion Robertson said a 1% fall in returns would
industry, including ever-increasing logistic, immediately add $16 million to the company’s
reputational and financial costs. Below are bottom line(13). It is clear the problem of fit needs
some of the burdens placed on the industry to be solved for both retailers and consumers,
because of poor fit. but how?
1 2 3
Fit-related returns cost fashion Returns are damaging to “Current return rates are around
retailers millions in lost revenue, the environment, increasing 30%, but climb up to 50% for
shipping and processing costs. congestion and CO2 emissions. expensive items.”(14)
4 5
Lack of accuracy in fit Excessive returns lead to higher
reduces customer satisfaction inventory, warehousing and
and potential lifetime delivery costs.
value of the consumer.
PAST ATTEMPTS HAVE FAILED
Retailers have been proactive in trying to break Left with no alternative, e-tailers are forced to
the ‘barrier of fit’ between fashion brands continue their strategy of free returns, despite
and shoppers. There have been attempts to the cost and scale of returns threatening the
re-establish a universal metric for size, but long-term profitability of Europe’s largest online
these have largely failed with the concept fashion retailers, including ASOS in the UK and
becoming increasingly out-dated in an age of Zalando in Germany.
personalisation and ‘me’.
Until now. Recently some of the most
Retailers have also been compiling vast experienced and brightest minds in fash-tech
quantities of data about customers to help have developed new tools to overcome the
them find fit, but this information is fragmented challenges of size. These innovative products
across the industry and unable to provide an pivot around a core belief: the fashion industry
easily accessible ‘single view’ of the individual, is evolving from the era of mass fashion into the
which allows the customer to translate size age of ‘me fashion’.
across different brands.
13 Fits Me qualitative research Feb 2016
14
Internet retailer, https://www.internetretailer.com/2015/12/31/ringing-new-year-rush-online-returns.IT’S TIME FOR A BETTER FIT
There is a new way. Tools developed in the Thomas Pink reported customers
fash-tech community are already disrupting using Fits Me typically resulted
e-commerce in the retail sector, allowing in 21% higher sales.
customers to discover ‘fit’ across the market
and bringing the consumer and retailer
With 85% of customers saying they return to a
together. This evolution can be expressed
brand because of fit(15), there are also substantial
with one simple, unique proposition:
opportunities to increase loyalty. Additionally,
It is time to turn mass fashion into me fashion. by removing the uncertainty of size, ‘me fashion’
opens up the possibility of greatly increased
Based on this core principle, simple, unobtrusive gifting between family and friends within the
products have started to bring ‘me fashion’ to fashion sector.
the fashion industry. Easily integrated into any
e-commerce platform, they are fundamentally Future success for fashion brands rests upon the
changing the relationship between consumer successful transition from mass fashion to me
and retailer, enabling customers to find clothes fashion. To thrive in the future, more and more
that fit, wherever they shop online. companies are taking their first steps to a truly
personalised shopping experience, creating
These tools are already being used successfully value for both retailer and consumer in the
by leading U.S. fashion retailers, acting as a digital marketplace.
catalyst to fewer abandoned carts, fewer returns,
and higher average transaction value.
RESULTS OF AN IMPROVED FIT:
€
Increased conversions Increased transaction value Decreased number of returns
Me fashion gives the shopper When customers are confident Pin point accuracy of fit can
the confidence in style and fit your clothes fit and flatter them lead to a 20-70% drop in
to click ‘buy’. This makes your they’ll buy more. After all, a fit-based returns.
customers happy, eliminates great pair of Jeans always needs
multiple purchases and a great shirt.
reduces the cost of returns.
THE VALUES EMERGING FROM PERSONALISED
ONLINE SHOPPING EXPERIENCE:
Increased loyalty Increased number of positive Increased life time value
Me fashion gives the shopper reviews A great retail experience
the confidence in style and fit When a jacket arrives and fits inspires confidence.
to click ‘buy’. This makes your perfectly, it’s a fantastic feeling. More trust equals greater
customers happy, eliminates Loyal customers love to share loyalty and increases
multiple purchases, and their successful shopping repeat purchases.
reduces the cost of returns. experiences with others.
15 Ed Gribbin, EditedFIT NO LONGER BEING AN ISSUE
The evolution of mass fit into me fit is at the Further details of the survey answers used here are
available in the ‘Knowing Them, Knowing You’
forefront of the revolution within fashion white paper.
retailing. Tools that embrace this proposition
help support the consumer and streamline their
online experience to make it better, helping
the industry solve one of their greatest online
challenges – the problem of perfect fit in the
digital world.Our knowledge can be yours. Understanding the choices and
fit profile of your customers lets you tailor a shopping experience
that suits them. Make their time with you a personal, rewarding
experience they’ll want to return to.
Visit Fits.me to book your demo today.
Contact
(0)207 427 81 77
hello@fits.me
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