In the evolving landscape of 2024, the retail industry continues to grapple with the challenge of online returns, which has burgeoned into a critical issue for sustainability and profitability.

The surge in returns, a trend that saw a 95% increase from 2014 to 2019, has not only persisted but intensified, prompting urgent discussions at environmental summits like COP.

Sustainable strategies and technologies: retailers are now deploying innovative strategies and technologies to mitigate the environmental impact and protect their margins. The focus is on creating a circular economy within the retail sector, where returned goods are repurposed or recycled, rather than contributing to landfill waste.

The shift in consumer consciousness: consumer behaviour has undergone a significant shift, with a growing number of shoppers (34% as of recent studies) prioritising sustainable brands. This consciousness is reshaping the retail landscape, compelling companies to align their practices with eco-friendly values.

Technological innovations:
  • virtual fitting rooms: retailers such as ASOS and H&M are leveraging VR and AR to create virtual fitting rooms, allowing customers to visualise products on 3D models tailored to their measurements, thus reducing returns due to incorrect sizing
  • smart basket analysis: advanced algorithms now prompt customers when they have similar items in their basket, reducing the likelihood of purchasing multiple sizes for comparison
  • predictive sizing tools: utilising AI, retailers are providing personalised size recommendations based on past purchases, leading to more accurate online shopping experiences
  • Selective recommendations: AI is also being used to suppress high-risk recommendations, such as items a customer frequently returns, to minimise the chances of further returns

New distribution models: the industry is exploring new models for distributing returned items, including partnerships with charities and the creation of sub-brands dedicated to repurposed goods, fostering a more sustainable retail ecosystem.

Rethinking return policies: there’s an ongoing debate about the ease of return policies. Some suggest moving away from free returns to encourage more thoughtful purchasing, while others advocate for enhanced technology to ensure customers make the right choice the first time.

The path forward: by addressing the issue of returns with a combination of technology, policy changes, and consumer education, the retail industry is poised to reduce its carbon footprint significantly and enhance profitability. The commitment to sustainability is not just about meeting immediate needs but also about being at the forefront of innovation for the betterment of society and the environment. The steps taken today will pave the way for a more responsible and profitable future in retail.

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