Retail

Hack the take-make-waste model

introduction

Did you know?

At a speed of thirty to fifty collections a year, fast fashion reduces the lifespan of a piece of clothing to just a couple of weeks. Ultra fast fashion platforms even launch three to five hundred styles per day.

A traditional business model can be summarized as follows: you take your resources, turn them into a product, sell it and after use (sometimes even before), the item is thrown away. Meet the take-make-waste model. This is slowly changing: circular business models add a sustainable spin to the traditional linear model. In the European Green Deal, the EU’s plan to achieve climate neutrality by 2050, circular business models are key. The textile industry is one of the priority industries in this Green Deal. Here you’ll find all you need to know as a textile company.

 

SO, WHAT CAN I DO?

A lot of big shots are already doing it: installing a take-back model. The possibility to return garments to the retailer, who gives them a second life as resources for new items, is gaining popularity. Retailer and manufacturer are often one and the same company in this story.

A second big movement is taking place within the peer economy or the sharing economy, where consumers tend to pay for using clothes rather than owning them. The rise in clothing libraries, where you can rent clothes, is just one example. Initiatives like swishing or swapping clothes are becoming more and more common as well.

Furthermore, today’s clients want to be involved in the design process and attach more importance to the experience. Focusing on this as a retailer will enhance the bond with your customer and create ambassadors for your brand. Small services do the trick, like offering a repair service, styling advice or made-to-measure clothing, or letting the customer pick his or her own print or pattern.

There are also plenty of online possibilities to give clothes a second life. A lot of platforms enable peer-to-peer selling or swapping.

What’s often forgotten in the sales process, is the impact of your brand’s marketing efforts. Think of clothes hangers, tote bags or price tags. Small changes in this area can make a huge difference.

Selling to B2B customers, too, there’s a lot you can do, like organizing a digital showroom. For your physical showroom, in turn, you can invest in streamlining and optimizing your sample collections. A bit of careful planning goes a long way to limit their number.

Introducing new business models can be quite a challenge and can be met with resistance. Will it pay off? Will customers be interested? Get cracking with short-term objectives and proceed step by step.

strategies for Retail

Keep your e-commerce sustainable

A lot of people shop online these days, especially for clothes. The Market Monitor released by Becom, the Belgian federation for e-commerce, reveals that Belgians spent some 3.930 million euros at physical fashion stores in 2023, while 2.474 million euros went into online fashion purchases. So, the online share of the fashion sector is still smaller than the offline share, but it did increase by about 2% in 2023 compared to the previous year.

Online shopping is easy for customers, of course, but does come with a high risk of returns. In their 2024 report “Volumes and destruction of returned and unsold textiles in Europe’s circular economy”, Tom Duhoux, Dina Bekkevold Lingås and Lars Fogh Mortensen say that one in five fashion items bought online in Europe is returned.

Sometimes logistical problems are to blame, for instance when items get damaged or arrive at the wrong doorstep. But in “Return to Sender?” (2022), Heleen Buldeo Rai, a researcher at the Vrije Universiteit Brussel, argues that returns are mainly due to “quality uncertainty” and “fit uncertainty”. Online shoppers cannot properly assess whether, first of all, an item will meet their quality standards, and second, whether it will be a match in terms of style, fit and size. Many consumers try to tackle these issues by “wardrobing”. They order the same item in different colors and sizes, and they return what they don’t like.

Online shopping is not necessarily worse for the environment. Quite the contrary. Home deliveries actually have a smaller carbon footprint than physical shopping trips by car. But when we factor in the many returns, the benefits of e-commerce are heavily reduced. Processing returns causes waste and CO2 emissions, not to mention the increase in transport kilometers and the chance of items getting damaged on their way back to the store or warehouse.

Jasper Vloedgraven, Chief Revenue Officer at the Dutch company Returnista, calculated what a no-returns scenario would mean for Belgium. He arrived at a staggering 50 million fewer shipments per year; 4.3 billion fewer transport kilometers, and a reduction of € 450 million in e-commerce costs. Naturally, the logistics costs would go down too, you’d have fewer customer queries, no refunds, and more profit, happier customers and more growth. Vloedgraven says that a 1% return rate reduction already results in a 1.5% increase in EBIT or earnings before interest and tax.

Moreover, customers don’t like returns. They don’t necessarily have the health of the planet in mind; often, they’re just put off by the hassle. So everyone benefits from fewer returns. We therefore want to share Buldeo Rai’s key prevention strategies, taken from “Return to Sender?” and from her talk at “Return to Zero”, a workshop organized by Flanders DC and Becom on March 28, 2024. There are three main areas you can focus on to reduce returns: customer-based, monetary and procedural.

CONSUMER-BASED INSTRUMENTS TO MITIGATE RETURNS

The essence of a consumer-oriented prevention strategy is to provide accurate and clear product information, with or without the help of technology. This strategy addresses the root causes of the problem, namely “quality uncertainty” and “fit uncertainty”, which together account for 70% of all returns.

1. Charts, descriptions and recommendations
By adding recommendations, descriptions and charts to your webshop, you can reduce returns by up to 5%, Buldeo Rai found.

For starters, size charts are a must. This very simple addition can already cause a 2 to 5% drop in returns. Whether including model size information also helps has not yet been conclusively proven.

Secondly, additional product advice is helpful. Consider a tool that recommends the right size, for example based on previous purchases. Buldeo Rai refers to a study in the US where, thanks to such a tool, 0.5% fewer shoes were returned.

Furthermore, you can alert customers that sizes run large or small, as Zalando did in a 2021 European study with SizeFlags. These ‘flags’ reduced returns by 3.8% and proved most effective for items that are slightly larger than normal.

Shavatar and SCIMM are Belgian tools that provide sizing advice on webshops, using customer preference data and body shapes, and in the case of Contour Lab, the advice also includes color consulting. Other solutions include Wair, True Fit, Fit Analytics and Fit:match.

2. Reviews
Reviews offer useful, subjective information about quality and fit to other online shoppers. They can reduce returns by an impressive 49%. Buldeo Rai does mention two caveats. First, the reviews should not be more positive than the long-term average. Overly high expectations just lead to more returns. And second, reviews are not effective when written by a “top reviewer” selected by the retailer.

A few more tips to maximize the effect on your returns:
The more other customers rate a review as “helpful”, the more it leads to a decrease in returns. 
The more reviews are available, the better the system works.
Reviews have the best result when they contain both “evaluation” and “reference” information. An evaluation is a reflection on the item and what consumers like or dislike about it (e.g., “It doesn’t fit”). A reference means that the reviewer shares something about themselves (e.g., “I’m tall”).

Reviews reduce returns and save you money, but of course it also takes time and money to set up and maintain a review system (and perhaps deal with fake reviews). Moreover, reviews are especially interesting if you sell the same items for a longer period of time, or work with large volumes or marketplaces. A possible solution for those who have short seasons and/or produce small batches is to have customers review a particular model. If you stick to the same name for a certain model, you make it clear that the item is actually the same, even if you changed something small or used a different fabric.

3. High-quality visualization
The more realistic your product visualization, the less likely customers are to return the product. When uploading photos, make sure they convey factual information. If they provide subjective information or, in other words, only set an atmosphere (e.g., showing the item in an inspiring setting, surrounded by attractive people), they create unrealistic expectations about what the customer will look like, and you’ll end up with a higher return rate.

Above all, the photos you publish should say something about the quality of the item – a criterion that 67% of consumers understandably considers “very important”, according to research by US agency MDG. You can capitalize on this with the option to rotate pictures or view them from various angles. Zoom technology is also crucial. It allows your customer to carefully inspect all the details, from the print to the seams, and from the fabric to the buttons.

A 2013 American study cited by Heleen Buldeo Rai in “Return to Sender?” links every one-unit increase in zoom usage to a 7% decrease in the odds for returning. Close-ups are a great alternative to zoom technology. Most consumers use their smartphones to shop online, and it’s hard to zoom in on such a small screen. Moreover, your webshop might become too heavy if all your images are in super-hi-res.

Experts also recommend user-generated content. To get authentic and realistic product representation, it’s a good idea to have other shoppers share their images on your website.

A purchase-risk notice is another strategy that belongs here. Adding such a warning is a smart move when the product pictures don’t perfectly match the reality. Experiments show that a message like “the actual item may differ from the picture” has no negative effect on purchase intention (meaning it doesn’t deter customers), but it does decrease return intentions. (We can’t talk about return rates because the study was conducted with respondents, not real consumers.)

Finally, you can discourage returns through infotainment or by sharing the story of your product. When customers learn more about the design, the material, who made the item and why, they make a more conscious decision and are less likely to be unpleasantly surprised when their parcel gets delivered. And that, in turn, results in fewer returns.

Color swatching, or the ability to see an item in different colors, has no significant impact on returns, according to Buldeo Rai. Experiments with 3D visualization yield conflicting results, and the effect of videos has not yet been studied.

4. Virtual reality
VR works with “fit assistants”. Consumers upload images of themselves or scan themselves, then virtually try on shoes or clothes. A digital fitting room could result in 56.8% fewer returns. We should note that this percentage comes from a study conducted in China, where shoppers tend to be a bit more tech savvy.

The best results are achieved with personalized avatars (based on a scan or picture). The use of such an “alter ego” led to 54.1% fewer returns in the Chinese study, compared to 29.4% with non-personalized avatars. In the latter scenario, customers could choose a model with the same body type to try on different item(s).

Implementing VR on your webshop is often a significant investment, but new companies are continuously entering the market with VR software solutions. Well-known players include Fit:match, Zeekit, Fit Analytics, True Fit, WAIR, Shavatar and triMirror.

5. Hotlines and chatbots
You can also set alerts for wardrobing and call customers who display this behavior. For example, if you see that someone is about to buy the same item in both M and L, you can phone them to help them find the right size.

Chatbots are a more sophisticated, automated version of such a hotline. They can make recommendations based on purchase history. Hotlines and chatbots seem like good tools in the fight against wardrobing, but Buldeo Rai stresses that their effectiveness has not yet been conclusively proven.

6. Awareness
Reducing returns is a team effort. Everyone needs to be on board – and that includes your customers. Most consumers will probably want to be part of your sustainability story, but they might not be (sufficiently) aware of the impact of their returns. Communicating about this can be detrimental to your sales (ideally, such transparency curbs impulse buying), but it does make your customers more engaged with, and more loyal to, your brand.

Another way to use customer contact is by politely reminding serial returners of the negative effects of their shopping behavior. Artificial intelligence can help you identify those customers.

MONETARY INSTRUMENTS TO PREVENT RETURNS

There are several financial measures you can take to prevent consumers from mindlessly returning purchases.

Are you providing full or partial refunds? In the former scenario, you refund the total amount a customer paid for an item, including taxes and surcharges. In the latter, you make customers think twice about their purchase because they will not get the full amount back.

It might be smart to charge a restocking fee or a return fee: a fee that covers the costs associated with processing returns and getting the returned items ready to be sold again. This measure is common in the US, but less easy to implement in a European context, where consumers have the right to return online purchases within 14 days of receipt. You can of course also turn the system around, offering a discount or a gift to customers who do not return anything. Shoppers are more likely to hold on to their purchase if they get a “keep reward”, such as free shipping on the next purchase.

Return rates typically increase when you implement a free shipping policy. A study by Siham El Kihal and Edlira Shehu (2022), cited by Buldeo Rai at Flanders DC and Becom’s “Return to Zero” workshop, even reported an 18% increase. Therefore, it could be a good idea to charge shipping costs. Setting a minimum purchase threshold for free shipping can yield mixed results. Your returns could go up because of customers adding random items to their shopping cart just to reach the threshold. But then again, you can avoid this problem by recommending a gift card to them (which has the added advantage of making them come back to your shop).

In addition, you can prevent wardrobing by limiting the number of items a customer can buy. Finally, it helps to make customers pay for their purchase before it arrives. Post-purchase payment options typically result in higher return rates.

PROCEDURAL INSTRUMENTS TO REDUCE RETURN RATES

Finally, it’s worthwhile to take a closer look at your processes.

1. Review your logistics process
How you organize your logistics has an impact on the number of items customers return.

You could for instance experiment with cycle-time optimization. The faster consumers get their parcels, the less inclined they are to return anything. When deciding whether to ship items together or separately, a one-week delivery time is a reasonable threshold. It’s fine to make your customer wait a few days to consolidate items that are stored in different locations. But if delivery consolidation means your customer has to wait for their order for over a week, then you’re better off shipping the items separately.

Think carefully about your drop-off point, too. Having customers return items to your store not only boosts sales and saves you money; it also creates the perfect opportunity to help shoppers find the right size, for example.

Want to analyze your logistical process to mitigate returns? You can rely on an external partner like Returnista or Returnless, or get started yourself, using this roadmap.

  • Step 1:
    Find the customers who are abusing your business, meaning that they cost you more than they bring in. On average, they amount to 1% of a business’ clientele.
    • You can identify these profiles by filtering out customers who purchased 3 or more items in the past year, and then comparing their purchase and return data. You are actually only losing money to customers who return more than 75%.
    • Possible next steps vary widely. You can notify “problem customers”, exclude them from your newsletter, or even consider blocking them on your payment platform. Always consult with a lawyer before taking the more drastic final step.
  • Step 2:
    Identify high-risk products. Start with your bestsellers (your top 10) and work your way down:
    • calculate the number of returns
    • analyze the return reason(s)
    • depending on the reason, you can adjust the product description, discuss quality and/or fit with your supplier, remove the item from your webshop, ...
    • monitor the impact of the changes
    • repeat the process for the next 10 products

2. Don’t be too flexible in your returns policy
Are you applying “effort leniency” or, in other words, are you making it easy for your customers to return items? Hassle-free returns seem to be the industry standard, yet considering the financial and environmental impact, it might be better to introduce deterrents.

For example, you could consider omitting (prepaid) return envelopes, or asking customers to fill out a form explaining their reasons for returning an item.

3. Discourage returns with labels and packaging
It may sound surprising, but labels and packaging have an effect on the number of returns, too.

  • Anti-wardrobing labels.
    Attach large, highly visible labels to clothes that are frequently returned, to prevent wardrobing. Customers can still try on your items, but they can no longer wear them once and then return them.
  • Personalized packaging
    If you personalize your packaging, you’re no longer legally required to provide free returns.
  • Pretty packaging
  • Shipping your items in a beautiful box, maybe even gift wrapping them, reduces the risk of returns. This means that, if you opt for sustainable packaging, it’s still important to make the result look (semi)premium.
  • Safety packaging
    This type of packaging ensures that your shipments arrive in impeccable condition.
  • Final check
    By doing an extra check before shipping, you can be reasonably confident that the quality will at least not be a return reason.

FINALLY …

A world with fewer returns is not only necessary, but feasible. Depending on the product, the consumer behavior and the specific issue, you can select the best strategy: consumer-based, monetary or procedural – or a combination.

In any case, it’s key to get your entire team on board. Management will probably better understand the importance of returns when you start using them as a KPI. For example, offering free shipping will boost your sales, but because the number of returns will most likely go up along with it, such an action is a bad move, both from an economic and an environmental perspective. By closely monitoring the effect of your actions in those two areas, you can make adjustments when necessary. Close collaborations are not only a must with management, but between every department. After all, a lot of different profiles in your organization are affected by returns.

The advice on this page resulted from “Return to Zero”, a Flanders DC initiative in cooperation with e-commerce organization Becom. “Return to Zero” was made possible with support from the FPS Mobility and Transport.

Logo FOD Mobiliteit en Vervoer

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Rethink the definition of ownership

The idea behind the sharing economy or peer economy is that you have access to a certain product or service, rather than owning it. Take cars, for instance. They used to be a status symbol, but younger generations don’t regard them that way anymore, which is why initiatives like car sharing are catching on. In fashion, too, young people tend to rethink the definition of ownership, selling their used (second-hand) clothes via online platforms for preloved items, or swapping them.

SWAPPING: LET’S GO SWISHING

Swishing vzw is a non-profit organization that specializes in, well, swishing. They organize pop-up events where you can leave your clothes behind in exchange for coupons. These coupons, in turn, can be used to buy someone else’s clothes. Swishing’s twin sister Swapping blew over from the States and also specializes in events where you can exchange clothes.
 

CLOTHING LIBRARIES: LENDING OR RENTING FOR SUBSCRIBERS

‘Wear beautiful clothing, but not at the expense of people and the environment’, LENA’s website states. This Amsterdam-based fashion library opened its doors in 2014 as an alternative to bulging wardrobes and fast fashion. After all, it’s common fashion knowledge that we wear 20% of our clothes 80% of the time.Various subscription options are available from LENA: you can lend clothes that you simply swap for others after a while.
www.lena-library.com

Similar initiatives are appearing in Paris, Malmö and Berlin. In Belgium, BeCoquette is paving the way, as is the more recently launched clothing library Dressr.

 
LEASING CLOTHES?

In 2013, MUD Jeans pioneered the lease option. For €10 a month, customers can lease a pair of jeans. After a year, they become their owner, and they can decide to keep them or exchange them for new rental pants. Customers that get a second pair pay less. High-end brands like GANNI have recently implemented a lease model, too.

 

ONLINE SHARING – PASSING CLOTHES ON

Click through to ‘a second life at the online marketplace' for more information on online sharing and the collaborative consumption of clothes.

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Go for a more service-oriented business

While it used to be important to buy a lot (without really considering the consequences), today’s customers attach more importance to having a say about the things they buy and shopping consciously. This trend gives rise to a lot of speculation: could consumer involvement have a positive effect on sustainability? The theory goes something like this: the higher the involvement, the longer a consumer will cherish a product (and its maker).

It might be interesting, then, to incorporate this into your sales process and to turn the purchase into an experience for your client. By including such a service, you create real ambassadors for your brand.

Café Costume has become synonymous with this principle. They specialize in tailor-made suits and treat their clients to a two-hour experience that will last long after they leave the store: the visit lives on in the wonderful story they tell about it.

In addition, several brands offer a styling service that not only makes for a nice experience but also discourages impulse buying and results in purchases that last longer.

Think about the services you could offer as a designer. Could you do made-to-measure clothing? Perhaps a styling event might work? Or would you like to offer a repair service, like Nudie Jeans?

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  • Bond with your customers
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  • Use a ‘made-to-measure’ system
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A second life at the online marketplace

Borrowing and sharing is not all that new; people have been doing it for ages. The novelty is that these days we also borrow from and share with complete strangers.

Food for thought:

Up to 30% of the clothes in people’s wardrobes are never worn.

The internet is a huge facilitator, providing previously unseen possibilities for giving away, swapping and selling or buying second-hand. Various sites and apps bring suppliers and buyers together (sometimes in return for a fee).

Big and well-known brands from various segments are teaming up with these online platforms, sometimes even investing in them. Kering, for instance, pumped quite some cash into the Vestiaire Collective platform. Via the ‘Brand Approved’ service, customers can resell their clothes with the brand’s stamp of approval: an innovative way to boost the preloved principle. Etsy recently added the Depop platform to its portfolio.

When products are shared or sold on, we don’t have to make as much new stuff, meaning fewer resources are used. In addition, borrowing and sharing saves money. It costs a lot less than buying something new. The person who has something to share might, in turn, make a small profit – though he or she can obviously also decide to share or lend something for free. There is a paradox to this trend of selling unwanted clothes online, though. Because it’s so easy to get rid of things via these platforms, consumers may be tempted to buy more clothes and simply resell them after a little while. In other words: this option does not necessarily reduce overconsumption. Continually sending clothes back and forth, moreover, increases their environmental footprint.

Finally, even the main shopping streets are dotted with second-hand stores these days. They used to be associated with a certain style, but now there is a nice offer for every segment.

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Think about the impact of your marketing

As a fashion designer, you can reduce your environmental footprint by paying attention to all the little extras. They are often overlooked, but they do have a large impact. Yet keep in mind that decisions about labels and tags are often already made in the production phase.

Food for thought:

68% of women want to buy sustainably, but only 11% know where to go.

CLOTHES HANGER

This useful item is frequently forgotten, though it passes through millions of customers’ hands: the clothes hanger. Worldwide, 8 million plastic hangers are discarded every year. Picture the Empire State Building stacked from floor to ceiling with clothes hangers, and multiply that by 4.6 to get an idea of this enormous quantity.

What happens to all those hangers which are carelessly tossed in a box under the counter? What are they made of? Are they durable? Are you going to reuse them? If you offer your clothes in shop-in-shops, make sure to talk to your partner about improving the sorting and recycling process.

Get some inspiration here, or go hunting for information yourself: there’s lots to find out there.

 
PRICE TAGS AND BAGS

Another item to consider is your price tag. It’s easiest to look for paper or cardboard ones that you can recycle. Make sure to avoid plastic when attaching the tag to the garment: otherwise people will be tempted to consider the entire tag residual waste. Also pay attention to the use of ink. How about using soy ink instead of traditional ink, for instance? A lot of brands get creative with their labels, printing inspiring quotes or brand information on the back of their price tags.

Big plastic bags are out of the question these days. Paper bags are becoming more common, but try to avoid the laminated versions and carefully select your ink. Perhaps you can go for reusable bags?

Can’t see the wood for the trees anymore? The ‘circular packaging in the fashion industry’ infographic is sure to help you gain perspective, just like this template that you can use to map your packaging.

 
CARE LABELS & WASHING INSTRUCTIONS

The labels that are stitched into the clothes themselves are a whole different ball game. But here as well, common sense is king.

The smallest step is to work with tags made from organic cotton. In the case of single-material clothing, make sure your label is made from the same material.

Are you keeping your recycling options open? Then your label should also be recyclable. Dare to go a little further? Check out washable ink for your printed labels.

Also think about what to put on your label. You could include washing instructions so customers can take better care of their clothes. Consider putting the clevercare.info symbol on your label to guide consumers to this website with more washing instructions.

Yet, as we mentioned before: the best time to think about your labels is during the design and production phases!

 

USE YOUR COMMUNICATION CHANNELS

You could use your communication channels to share your stories. Discuss your choice of materials, your sustainability efforts and their results on social media, via direct mailings or on your website.

However, make sure to avoid the greenwashing trap. Communication is key, but don’t present yourself as more environmentally friendly than you really are. Dare to discuss the things that are not yet as they should be. Nobody is perfect! Share your goals with your customers, as well as the steps you’re taking to do better in the future.

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