Duurzaamheid in de e-fashion

The e-fashion branch in the Netherlands has to deal with a lot of waste, caused by by the high amount of returns for fashion products. For the most part, these returns are caused by brands using different measurements for the same size. Returns in e-fashion are discouraging for consumers and the costs for cleaning and transport make it hard for e-fashion stores to remain profitable. This rapport therefore intends to improve the sustainability in the e-fashion branch in the Netherlands by reducing the return rate.

 Considering the macro economic situation, prospects for e-fashion stores in the Netherlands are promising. Most consumers are already used to purchasing products online and will continue doing so. Furthermore, the economic situation has improved significantly compared to last year, making it more likely for consumers to spend money online. Lastly, there is a demand for sustainable production and transportation by consumers in the Netherlands.

While customers in the Netherlands expect a sustainable policy from fashion firm, this research shows that consumers are not willing to pay for a more sustainable e-fulfilment. However, they are willing to cooperate in order to increase sustainability.

To reduce the return rate it is vital to distinguish fashion and basic fashion products. Fashion products have higher return rates because of sizing and style differences. These products are also more expensive and are generally internationally available. Basic fashion is cheaper and less subject to trends. They are also more nationally orientated, and therefore the sizes are a better match for the posture of the average consumer in the Netherlands. These factors combined cause the return rate for basic fashion products to be much lower. Because of this, the recommendations in this report are aimed at e-fashion retailers in the Netherlands.

Returns are a big financial burden for e-fashion retailers: they have to pay transport costs, recondition returned products and they are unable to sell the product, while it is transported or at the consumer. Currently, e-fashion retailers in the Netherlands try to convince consumers to buy online, by providing extended services. These services include fast delivery and an easy return policy. Because of the possibility to return for free, consumer often buy multiple products to fit them at home. This causes the return rate to increase. Also, since transport costs often are only demanded for small orders, consumers increase their order size by ordering additional products. These products will be returned for free, avoiding the transport costs.

Another reason for returns is an ill-fitting product. Not being able to fit the products gives consumers a reason not to buy online. Consumers that do buy fashion online often are not sure whether their product will fit. Additional costs arise when deliveries are sent back to the seller because consumers often are not home and therefore unable to receive the order.

 To reduce the return rate in the e-fashion in the Netherlands, a change in strategic focus is needed. Instead of differentiating through high service, the firms should focus on improving customer shopping experience by optimizing the purchasing process. Secondary, they should focus on improving e-fulfilment efficiency.  To help customers to buy the right size article, consumers have to be guided into using a technical tool, which gives size advice. In order to make sure that customers are using the tool, there needs to be sufficient information on the website. Also, the price policy needs to be changed.

Transport costs have to be included in the retail price, and return fees have to be charged, if consumers don’t use the tool. Also, instead of delivering and returning by cargo transport, most deliveries should be carried out using pick-up-points. These are easier to use and reduce returns. Implementing all mentioned recommendations will reduce returns in e-fashion by 25%.