Clothing Brands are Preparing for a Surge in Post-Holiday Returns

An e-commerce shopper purchasing clothing during the holiday season. Post-holiday returns

The explosive demand we witnessed during the 2020 peak shopping season has carried over into 2021 with no signs of stopping. E-commerce sales in America exceeded 109 billion dollars in the weeks leading up to Black Friday, an 11.9% increase in spending from 2020. But while retailers are finally rebounding from the financial pummeling many took during the height of the pandemic, there is still the looming risk of post-holiday returns.

While all industries are affected by post-holiday returns, those operating within the fashion and clothing industries are especially vulnerable as they see some of the highest return rates in e-commerce. With the peak season in full swing heading into the final days before Christmas, how are clothing brands preparing for potentially unprecedented post-holiday returns this season?

What Makes 2021 Different From Past Holiday Seasons?

Despite being the 2nd pandemic holiday season for many of us, the 2021 holiday season has proven to be unlike any other peak shopping period we have ever seen in the retail space. Here are the most notable reasons why:

Shopper preferences have changed, for good: To say that the pandemic was wholly responsible for the shift in shopper preference towards e-commerce is a bit disingenuous. While store closures may have led shoppers into the world of e-commerce, the plethora of benefits that come with the e-commerce experience is why they stuck around. Brands have pulled out all the stops to offer a seamless, personalized, and engaging experience to their online shoppers knowing that e-commerce is likely to be the lifeblood of many businesses not just for 2021 but for the future as well. As the combined benefits of online shopping continue to expand, shopper preferences towards e-commerce are here to stay. 

Families have been reunited: Many of us had to forgo holiday gatherings last year, but as pandemic-level restrictions begin to ease, we have seen a resurgence in these events as friends and loved ones remain eager to reconnect with each other. Having missed the opportunity to exchange gifts last year, shoppers will be eager to impress this holiday season in both the quantity and quality of the gifts they buy. 

Supply has never been lower: It’s no secret that supply chain woes have wracked the global economy resulting in excess stockouts and millions of dollars in lost sales revenue for retailers. Unfortunately, this trend is likely to continue into the foreseeable future which is why shoppers are taking a more pre-emptive approach to gift buying this season. While retailers across all industries have adapted by expanding their sales and return windows, the deadlines for the majority of these returns windows fall within the first two weeks of January, meaning that retailers are likely to experience a flurry of post-holiday returns within that small time window.

How Have Clothing Brands Prepared for the Post-Holiday Returns Rush?

An e-commerce shopper returning clothing during the holiday season. Post-holiday returns

Offering alternative methods to return merchandise: Rather than having their online shoppers deal with the hassle of shipping back returns, brands like Levi and Pact have opted to partner with 3rd party companies that offer convenient, in-person return locations for online shoppers. This option bypasses a potentially lengthy and complicated shipping process, divides the returns processing requirements between the two companies, and saves shoppers money on any fees that may come with the return shipping service. This is an especially convenient addition for brands that lack a physical storefront

Optimizing sizing strategy: Size-related issues are the primary driver behind the copious annual returns within the fashion and clothing industries. Naturally, clothing brands wanted to address this issue to pre-emptively reduce the number of holiday returns for 2021. While some brands opted to refine their existing size charts and model dimensions, others achieved their sizing goals by implementing modern sizing solutions.

Modern sizing solutions (like WAIR’s Fit Advisor) leverage AI-driven, 3D technology to provide shoppers with remarkably accurate and personalized size recommendations at scale. When shoppers use these solutions to obtain their best-fitting sizes, their unique body dimensions are seamlessly collected and shared with the brand enabling them to better align their products with the body types of their shoppers. Brands looking to boost shopper confidence in sizing while simultaneously reducing post-holiday returns have fully embraced this technology with impressive results.

Will 2021 Continue the Trend of Continuously Rising Post-Holiday Returns?

While we cannot say with absolute certainty that return rates will continue to rise for 2021, we can look at several statistics that support this claim:

Bracketing is still extremely popular in 2021: Bracketing is the practice of buying one clothing item in multiple sizes with the intent of keeping the one that fits and returning the rest. It is a practice that (unfortunately) 62% of all consumers have engaged in during 2020. As shoppers continue to purchase clothing both for themselves and loved ones this season, bracketing is poised to make a considerable impact on post-holiday returns for clothing brands.

E-commerce growth will (inevitably) lead to increased returns: With 20% of all products ordered online being returned as compared to 8.89% in brick-and-mortar stores, e-commerce return rates dwarf in-store return rates. Since the overwhelming majority of holiday shopping has been conducted via e-commerce for 2021 and the e-commerce space has only continued to expand, this poses a potentially daunting post-holiday return scenario for retailers across all industries.

Recap

With the 2021 peak season currently living up to the hype, clothing brands are preparing for a potential surge in post-holiday returns. Strategies such as offering alternative return methods and optimizing one’s sizing strategy are likely to bear fruit as brands continue to navigate through the end of Q4 into the beginning of 2022. While it’s still too early to say whether return rates will spike as they did in Q4 2020, all signs point to 2021 following a similar trend.

 

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