While many online fashion retailers have experienced huge growth during the pandemic, they are also having to contend with the ever increasing problem of high returns.
Before the pandemic, scientists at the Observatory had already begun helping the industry to better understand and map the problem. Specifically, they partnered with Rebound Returns, a company which looks after online returns for a number of leading online fashion retailers, on a project which clustered customers according to their spending behaviour and profitability for retailers. It then mapped that information with specific data around their returns behaviour and also overlaid demographics such as the customer’s gender to build up a detailed dataset.
Creating solutions
Professor Nikolay Mehandjiev from the Observatory explains the background to the project. “We began working on this project before lockdowns were first introduced last year, lockdowns which have only further driven the growth of returns in online fashion. Rebound Returns was keen for us to analyse the problem in greater depth in order to help create solutions, as the habit of returning goods ultimately costs retailers a lot of money. Retailers were also interested in exploring how they could also stop people from returning goods in the first place.”
Sam Sahana, Chief Technical Officer and Board Director at Rebound Returns, who is also an Executive MBA alumnus of Alliance MBS, said the project had proved invaluable in terms of mapping the problem and designing possible solutions to tackling it.
“As we expected our study showed that young women in particular are particularly prone to returning goods, while it also showed how expensive items are not returned that much. We could also identify ‘renters’ who return the majority of their purchases after wearing them a couple of times, and the effect of lockdowns and sales on return rates.
“Now that we have built up this dataset we can begin to look at whether we can start to introduce specific return conditions for certain customers, and also at whether we can introduce different penalty terms for those who persistently return goods.”
Read full article at https://www.alliancembs.manchester.ac.uk/original-thinking-applied/magazine/issue-08/bigger-picture/
