‘The Ghost Economy’: Getting Sizing Standards Right
13 January 2020
Author: Jasmine Waters
The festive fun is now over and a brand new year has begun, meaning one dreaded thing for many brands – returns. In the USA alone, retailers lose approximately 600 billion dollars each year due to sales returns, something that arguably increases as the January blues kick in. Now known as the ‘ghost economy’, what can brands do to prevent unnecessary losses, and why is getting product sizing right so important?
What is the ‘ghost economy’?
According to IHL, the ‘ghost economy’ is a largely hidden cost that’s often associated with out-of-stock, overstock, returns and other order issues, each of which costing a business a significant chunk of their revenue per year. Mostly the effects of this are due to the reverse supply chain – what it takes to get back a used product from a customer to either dispose of or reuse – but such costs are rarely measured, and as a result can often be overlooked. Size and fit issues are frequently the cause of returns, with an estimated 50% of shoppers purposely buying multiple sizes with the intentions of returning the majority. This perhaps can largely be due to the consistent issue of sizing uncertainty many customers face when shopping with different brands. While sizing standards for clothing do exist, ready-to-wear retailers and manufacturers aren’t technically required to legally adhere to them. Not only does this mean brands can alienate potential customers by imagining an ideal body shape,
But also adds to the complications of correct sizing – and ultimately, piling up the returns. So how can brands best solve this issue moving forward?
How can brands combat sizing?
While what a brand itself can tell a consumer about its products is extremely important, the views of fellow customers often have a similar significant impact. One helpful way of achieving this balance is allowing reviewers to submit their own photos to the product’s website page. This adds a level of authenticity when shoppers are seeing what products look like, but also allows them to make more informed choices when purchasing, less likely to return the product. It is also worth checking to see if your ratings and reviews provider can offer an easy way to capture size and fit information from consumers to display on product pages to increase buyer confidence. Away from online sales, avoiding ‘vanity sizing’ (the labelling of clothes with sizes smaller than the actual cut of the item) is an absolute must. Platforms such as MySize and True Fit are thriving and have been created to give consumers the option to use mobile body scans to find exact real-time measurements. Using data to decode personal style, fit and size can be a functionality benefitting a wide range of retailers to claw back the cost of wrongly sized returns. Brands will never be able to completely eliminate returns, but making sure customers know exactly what to expect from a product can ensure they are avoided unless necessary.
Photo source: www.qstura.cat