To reduce returns, retailers are launching virtual try-ons

After the annual holiday shopping carnival in Western countries , retailers have to face another headache, that is, the return frenzy. Usually the pleasure brought by the shopping carnival disappears in early January .

According to foreign media PYMNTS research, after last year's holiday shopping festival , 63 % of consumers said they planned to return products, of which one-third would return products to offline stores , 31% would return products by mail , and another 21 % would return products to after-sales points designated by the merchant .

According to the National Retail Federation, U.S. consumers returned a total of $428 billion worth of merchandise in 2020 , about 10.6% of all retail sales. This return rate is consistent with other years in recent years, but online return rates more than doubled between 2019 and 2020 .

Since then, many retailers have been actively looking for ways to reduce the number of returns, as reverse logistics can be costly for merchants. Some companies, such as Gap, have launched virtual try-ons, allowing customers to see how items look when worn through augmented reality ( AR) technology .

Other companies , such as Rebecca Minkoff, Banana Republic and Express , have launched clothing rental and try-before-you-buy services , allowing consumers to pay a small fee to try on clothes and then buy them if they are suitable .

Services such as clothing rental , try before you buy and virtual try-on have also reduced the probability of consumers buying multiple sizes, keeping the ones that fit and returning the ones that don’t.

However, when customer returns occur , some retailers believe it is more cost-effective to refund the customer directly without taking back the goods.

Amazon and Walmart earlier this year piloted offering customers refunds while they keep the returned merchandise , but the service is also offered on a case-by-case basis, depending on the customer's purchase history and the cost of processing the return.

According to PYMNTS data, offering a 5% discount can convince 39% of consumers to give up the idea of ​​returning an item, while offering a 30% discount is enough to persuade nearly 60% of consumers to give up returning an item .

Consumers can also profit from items that merchants refund but don't need to send back . Second-hand platforms such as eBay, Poshmark , Craigslist and Facebook Marketplace allow people to resell , and unopened and new items can often fetch higher prices .

However, it should be noted that retailers must be wary of fraudulent returns . According to a study conducted by PYMNTS in collaboration with Forter, 44% of retailers have experienced malicious returns in the past 12 months. The National Retail Federation also stated that in 2020 , nearly 6 % ($25.3 billion) of returns were fraudulent .

Despite this, retailers are still looking for ways to simplify the return process . As more and more new brands emerge and market competition continues to increase, retailers can only strive to provide customers with a more seamless shopping experience in order to retain customers.

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