Little things are coming in the online fashion sale and not the ones that we consumers like. And it seems that, although they have been a key part of the success of ecommerce, it is about the end of free returns on this channel. Zara already has imposed in 30 markets a fixed fee of 1.95 euros for all returns made at home or at a collection point. In this case, it would still be necessary to approach a physical store to do the management at no cost, but things get complicated when we talk about platforms like Asos and Zalando.
Although the chains with a good online channel, such as Inditex, were the ones that best managed to resist the onslaught of the pandemic, now Trouble has arisen in paradise due to the large number of return orders that are being made in the current context.
Companies such as Zalando, Asos and Boohoo have suffered, in recent months, a wave of order returns that would be directly related to events such as the return to normality in physical commerce; the rise of Shein (without shipping costs from 9 euros and free returns) and the economic situation caused by the war in Ukraine and inflation.
For this last reason, added to the lower demand (fewer orders and of lower value), the sector leader suffered an increase in the cost per order of 10% in the first quarter. Also, their sales decreased by 1%, in which it is already the first drop in its history, and lost 61.3 million. As a measure, Zalando will extend the obligation of a minimum price per order to the majority of its 23 markets, after doing so in nine in 2019.
In the same line, the retailer British has also accused how inflation and economic uncertainty are taking a toll on the mood of customers. He is not only letting himself be noticed in the lawsuit but, above all, in a significant increase in returns.
This, as confirmed by José Antonio Ramos Calamonte, new CEO of Asos, has had “a disproportionate impact on profitability”. And it is that returns raise delivery and storage costs, yes, but they also prevent stock from leaving, and make it have to be sold below its real price.
All this has resulted in the company has cut the forecasts it had for this year and has gone from aspiring to benefits of 160 million, to expect a maximum of 69 million. In addition, an estimated growth of 15% has dropped to 7%.
In the case of the also British Boohoo, which is also being splashed, attributes it to a change in demand. And it is that, while the pandemic lasted, more clothes were sold at home, which have less tendency to be returned. Nevertheless, now that streetwear is back in demand, they are more susceptible to returns.
From Inditex they have argued that their measure of starting to charge for online returns in some of their markets, as well as charging for bags, has an environmental character. And it is true that they have a greater impact on it when they are made through shipments.
However, we have already seen how returns too they eat part of the profits of companies that they sell through the digital channel. only in the United States, in 2020, 10.6% of the sales generated in the commerce sector were gobbled up. Of course, in a more positive aspect, the end of free returns could benefit many SMEs, since it is a cost that the smallest have never been able to assume.
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