Retailers must increase sales this Christmas in order to compensate for higher online returns rate
December 10th 2013, London, UK – The higher rates of returns associated with online sales, combined with a probable – but unknown – record proportion of online sales, will put retailers at risk of providing misleading estimates of their ‘net Christmas’.
Heikki Haldre, co-founder and chief executive of virtual fitting room provider Fits.me, said: “There is always a rush in January to proclaim Christmas a success or a failure – even official bodies like the ONS publish provisional December figures by mid-January. This strikes me as simply too soon to guarantee any kind of accuracy; in borderline cases there is a risk that shareholders may be led to believe Christmas sales were up, when in fact net Christmas sales were down.”
“Why? Because, in every sector, the return rates associated with online sales are higher than return rates for offline sales. For clothing, the rate is an average of five times higher – 25% online versus 5%. This means that even an average retailer, now seeing online sales accounting for 22.5% of sales compared with 19.7% last year, will need to sell 0.62% more garments in order to ensure the same net – that is to say post-returns – sales,” he explained.
In January 2013, the ONS estimated that, compared with December 2011, the quantity of goods bought (all retailing seasonally adjusted sales volumes) in December 2012 had increased by 0.3%. So, while 0.62% may seem a small percentage, it would be more than enough to turn an apparent increase in retail sales into a damaging decrease if similar trading conditions are experienced in December 2013.
Fits.me provides virtual fitting room solutions for clothing retailers that help to deliver an online buying experience similar to the offline experience – specifically by enabling shoppers to try on clothes “virtually” before they buy. This largely eliminates the biggest single reason (“fit”) why shoppers later return garments bought online, contributing to a significant reduction in overall garment return rates.
The BRC-KPMG Online Retail Sales Monitor reported that online accounted for 22.5% of total sales for 2013, compared with 19.7% for 2012 (August figures).
About Fits.me
According to Mintel, different sizing standards among brands and retailers make online clothes shopping a challenge for six in ten shoppers. Fits.me’s virtual fitting room solutions help boost the revenues and the profitability of online clothing retailers by enabling them to overcome this online fit problem, increasing conversions and reducing garment returns for reasons of poor fit.
The Fits.me Virtual Fitting Room is the only fit solution to provide shoppers with a photo-accurate visualisation of fit. It delivers the in-store fitting room experience online and on mobile devices by displaying a real photograph that shows exactly how the garment the shopper is looking at will fit on any shopper’s body size and shape. Fit Advisor, a complementary solution to the Fits.me Virtual Fitting Room, provides fit information and recommendations without photography.
Clients include Austin Reed, Avenue 32, Baukjen, Bilka, CC Fashion, Crew Clothing, Ghost, Hawes & Curtis, Henri Lloyd, Isabella Oliver, John Smedley, L.K.Bennett, M&Co, Mexx, Musto, Nicole Farhi, Pretty Green, QVC, Savile Row Company, Superdry, Top Vintage, Thomas Pink and Viyella.
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