Tackling Fashion Returns in the Netherlands
The Dutch fashion industry faces a significant challenge: high return rates. Typically ranging between 25% and 50%, these returns are predominantly driven by issues with size and fit, accounting for approximately 70% of cases.
This isn't just an operational hurdle; it carries substantial financial and environmental costs.
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The Cost of Returns
Each return incurs significant costs, estimated at around €12.50. This includes logistics, processing, inspection, repackaging, and potential depreciation or disposal of the item. For SMEs, these costs can severely impact profitability.
Source: (NOS, z.d.-b)
Environmental Impact
Beyond the financial burden, returns contribute to increased transportation emissions, packaging waste, and often lead to items being discarded rather than resold, adding to landfill problems. Reducing returns is a crucial step towards a more sustainable fashion industry.
Source (Zhang et al., 2023)
Introducing the Toolkit
This product was developed to address the research question: “How can fashion e-commerce companies leverage technological software solutions to reduce return rates?”
Research indicates that investing in technological software solutions can be a valuable step for fashion e-commerce businesses. It has become clear that many larger companies have already implemented one or more software tools. In contrast, many small and medium-sized enterprises (SMEs) have not yet adopted these tools, often due to a lack of knowledge about where to begin, unfamiliarity with the technical aspects, or a lack of awareness of the added value these technologies can provide. Taking the initial step toward implementation could make a significant difference for these companies. As a result of this research, a product has been developed to provide retailers with more guidance and clarity.
Introducing the Return Reduction Toolkit:
This toolkit is specifically designed for small and medium-sized enterprises (SMEs) in the Dutch fashion sector. It offers insights, practical solutions, and data-driven tools to help you understand, manage, and ultimately reduce costly returns.
Within this toolkit, you can explore best practices, evaluate software solutions, simulate potential return on investment (ROI), gain insights into your company's CO2 emissions related to returns, and understand the specific context of the Dutch market. This information will empower you to make informed decisions for your business.
The toolkit offers insights into the available software tools in the Netherlands, along with best practices and case studies, providing a comprehensive overview. Importantly, it addresses current research limitations in return and financial insight by allowing retailers to generate customized calculations based on their company data. Since businesses already have access to their internal financial and return figures, the toolkit is widely accessible, even for retailers with limited technical expertise or data analytics capabilities.