Size stumps sales of apparel online
Sizing-related issues are one of the biggest reasons behind returns in fashion and apparels, a category that accounts for the largest chunk of items being sent back on e-commerce portals in India by unsatisfied customers.
"When we look at reasons for returns, a bulk of it is not, 'We don't want the product', but it is, 'We want an alternative size in the same item'. Colour and detail are among the several reasons that lead to returns. But sizing is a slightly more difficult issue to crack in terms of providing an accurate representation online," said Arun Sirdeshmukh, business head at Amazon Fashion India.
Studies show that about 20-30 per cent of all fashion products bought online are returned. This is a category that accounts for about $6 billion (Rs 40,000 crore) of the total $32 billion gross merchandise value of online retail in India as of 2019, according to data from RedSeer Consulting.
A RedSeer report in March 2018 pointed out that the e-tailing industry is dominated by high returns and cancellations with the difference between shipped and fulfilled GMV being more than 30%. Fashion category has the highest cancellations and returns while mobile and appliances has the least, it said.
Amazon's Sirdeshmukh said it is true that apparel and footwear are the largest constituents of returns even within the fashion business as opposed to non-size categories, which would certainly be lower.
"Historically for Amazon, this returns figure has been significantly lower than the average (of 20-30 per cent)," he added.
"Fashion and apparel category is the most revenue-generating category, but it also has the highest return rate. If you include returns from both cashon-delivery as well, it could go as high as 40 per cent," says a spokesperson of Federation of E-commerce Sellers. The group represents around 500 online sellers across categories and major marketplaces.
He, too, says that a majority of the returns are due to sizing and quality.
Every time a customer returns a product, marketplaces such as Amazon, Flipkart, Myntra & Jabong charge us for both forward and reverse shipping, he adds.
"For a 500-gram package, we incur shipping charge of Rs 50 and reverse shipping charge of Rs 60. In mature markets, a customer bears at least some of that cost."
A representative of another sellers' body, All India Online Vendors Association, said reverse shipping is costlier because the logistics firms have to go to a specific location to pick up just that one parcel. "For forward shipping, they will pick up hundreds of parcels from me."
In addition to size issues, he said, return of products are also so high in this category because most online portals allow returns for a wide period of 30 days.
"Because of so many returns, a product gets worn by at least 3-4 people. After a product is returned to us, we repack and send it to the next customer. We don't have the margins to wash that garment after every return," said the seller.
The RedSeer report pointed out that the online retail industry needs to focus on ensuring the right products get delivered as 30 per cent is a good amount of revenue to be lost. However, Amazon's Sirdeshmukh said returns are a necessary part of doing business. "It is just like you give away some real estate in a store for trial rooms."
However, Amazon's Sirdeshmukh said returns are a necessary part of doing business. "It is just like you give away some real estate in a store for trial rooms."
"The no-questionsasked returns are a necessary evil for ecommerce companies to encourage consumers to shop online without the fear of not being able to return items if they don't like them," said retail expert and founder of Wazir Advisors, Harminder Sahni.
Nevertheless, returns are costs that eat into the finances of these online portals that are struggling to make profits. Amazon India said it sees a direct correlation between returns and products that have poor descriptions, details and photos.