Online returns are the new scourge of the UK’s retail industry. Growing by 95% between 2014 and 2019 alone, the threat to sustainability is enough to warrant discussion at the next COP summit.

Returns impact all points in the supply chain, wasting materials, fuel and resources. Worse still, data shows that returned goods are much more likely to end up in landfill.

As an industry, we need to quickly put in place new strategies and technologies to arrest the decline of already thin profit margins, while also building a reputation as pioneers of sustainability.

The rapid acceleration of online retail

All is far from lost. Over the last decade – and particularly during the ‘Covid months’ – our attitude to responsible shopping has changed. In fact, recent research shows that 34% of customers now look for brands with strong sustainable credentials when purchasing.

Customers are more likely to return items when they buy them online. This may be especially true of those new to online shopping who may benefit from more guidance on how to select the right fit, size and colour, so goods arrive exactly as expected.

Encouragingly, the pandemic has created a new appreciation of the vital contribution the retail industry makes to society in keeping us fed and clothed. This creates the perfect opportunity for our industry to demonstrate leadership in sustainability – not only for meeting the need for goods, but as an innovator solving wider issues for all sectors and the environment.

Forward thinkers are already achieving results

Technology can undoubtedly play a major role in helping our customers to buy the right products first time round, therefore avoiding returns and the unnecessary waste that comes with this.

  • Reducing returns due to wrong fit. There’s a growing trend for virtual fitting rooms, in which virtual reality (VR) and augmented reality (AR) help customers visualise products on 3D models based on their measurements. ASOS, for example, has created the ‘My Fit’ tool, which uses AR to show how the same clothes look on 16 different body shapes. H&M has also been on a long journey to adjust their womenswear sizing after publicly addressing a host of negative customer reviews.
  • Minimising multiple purchases of the same style item. If a customer has two similar or identical products of different sizes in their basket, retailers can send online prompts to check whether they have made a mistake. For existing customers (especially those who have returned items before), technology can be used to reduce the appetite for different try-ons at home by showing them colours and styles they’ve liked in the past.
  • Using next generation UX to drive more ‘right-first-time’ purchases. Retailers are also increasingly using predictive tools that use past purchases of sizes and fits to inform and correct online size choices. Some are also investing in higher pixel counts for their product images, more accurately reproducing colour and texture and thereby increasing the chance that the customer will be happy with their item.
  • Suppressing ‘high-risk’ recommendations. If a customer has returned a significant number of, for instance, shirts in the past, technology can be used to suppress showing them shirts as ‘you may also like’ suggestions.

Those in the retail sector are also finding new outlets to recycle and reuse items that are returned by creating new distribution and store models, either as part of their own store, as a sub-brand or in partnership with a charity or social enterprise. 

Finally, we need to ask whether we are simply making returns too easy. They benefit the customer, certainly, but at what cost to the environment? Perhaps if we moved away from the free returns model, where customers only pay for what they keep irrespective of how many items they originally bought, this would encourage people to be more discerning when filling up their baskets? Or perhaps we should look to technology to help the customer get it right first time, and help break their learned behaviours that have come to be accepted as the norm?

The good news is that in taking steps to reduce returns now, we can reduce our carbon footprint across the entire supply chain, while increasing profitability at the same time.

Discover how responsible retailing is key in transforming the customer experience

Written by

Andy McDonald

Andy McDonald

Business Development Director, Capita

Andy McDonald is a retail and logistics industry-focused leader with an international perspective helping companies deliver on their strategic goals. With over 25 years of experience, Andy is regarded as a specialist in digital customer engagement, contact centre strategy and customer experience analytics. Having an engineering background, Andy prides himself on remaining customer-focused while balancing technology and service-based investments on behalf of his clients.

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