Last year’s November e-commerce peak was 25% higher year over year and wreaked havoc on supply chains, while simultaneously leading to retailers’ footing an even larger bill for returns. This year’s shipping mania is expected to lead to a further 10% increase and even if many retailers can now handle delivery to the house with decent margins, a corresponding increase in returns could throw their profits into disarray. The costs of returns are so prohibitive – at least 30% of items bought online are returned vs. just under 9% in-store- that even the largest retailers are quietly telling their customers to keep items rather than return them. While the holidays’ potential to cause a returns tsunami is worthy of extra attention,companies leveraging the long-term and accelerating shift to e-commerce and the ability to effectively deal with the extra returns it causes, separates successful retailers from soon-to-be bankrupt ones.
Solving the returns issue before it starts
For the vast majority of retailers, the solution is to digitize their reverse logistics operations and increase efficiency to cut down costs. However, most retailers don’t have that ability in-house and when they turn to third parties, significant costs and time are involved while the issue wreaks havoc on their margins now.
According to Mckinsey, up to 70% of apparel returns are due to poor fit and practices such as bracketing [choosing multiple sizes to ensure the right fit], which 62 percent of online shoppers admitted to doing in 2020. When retailers take a preemptive approach, and help shoppers find their right fit, first time, not only are they eliminating the cost of high returns, but also they are providing a seamless shopping experience that will enhance customer loyalty. One company that is solving this issue, using an innovative and accurate approach is MySizeID. MySizeID is an easy and simple tool that quickly matches the shopper with their ideal size based on their real body measurements, helping them find clothes they will love and keep. It doesn’t require specialists and warehouse visits, instead, the company’s widget can be integrated into a retailer site with little effort and proven return reductions of 47% for brands such as Levi’s.
Brands that leverage MySizeID also have complete control over the degree to which they implement or test out the solution across their site and products, with higher implementation rates being highly correlated to a reduction in returns. The final piece of the puzzle is making sure that customers actually participate. MySize ID recommendation tech uses a patented algorithm helping customers to find their precise body fit by measuring themselves easily using their smartphone sensors. Furthermore, they have adapted their product to recommend sizing of kidswear, shoes, along with other hard-to-fit categories such as swimwear and lingerie.
Benefits beyond returns
Retailers don’t just benefit by fixing one of their costliest issues faster and more effectively than any traditional platform, the new shopping experience also provides a myriad of additional benefits. An increase in order values occurs when customers have confidence in the fit – MySize customers have seen order value go up by an average of 30%. Accurate sizing also minimizes environmental impact, which brands can leverage to align with their customers’ values – 77% of Americans are concerned with the environmental impact of the product they buy. And when in-store shopping finally roars back post-Covid, implementing sizing solutions in-store will allow consumers to skip the dressing room line and enjoy a more streamlined experience.
Retail challenges represent vast opportunities
E-commerce is here to stay and Covid-19 simply accelerated a trend that was already creating upheaval in the industry – harming those who fail to adapt while providing unprecedented opportunities to those retailers that get it right. By taking a sizing-based pre-emptive approach retailers can fall into the latter category, winning market share, while winning over customers in the process and reducing costs. While sizing isn’t the only factor to consider, for those looking to make a sizeable impact with the smallest amount of risk and investment a model that prioritizes sizing is definitely the right fit.
About My Size, Inc.
Founded in 1999 and located in Airport City, Israel My Size, Inc.is a unique measurement technology based on sophisticated algorithms and cutting-edge technology with broad applications, including the apparel, e-commerce, DIY, shipping, and parcel delivery industries. The company’s MySizeID solution for retailers enables shoppers to leverage the sensors built into their phones to take accurate measurements of themselves with just a few swipes and buy online with the confidence they’re getting the right fit every time. To learn more about My Size, please visit our website. We routinely post information that may be important to investors in the Investor Relations section of our website.