Tiktok gives retailers a headache with boom in returns culture
Retailers are facing a conundrum. Their customers are searching for and buying clothes via Tiktok and Instagram, but those same social media customers are increasingly less likely to keep the clothes they buy.
A surge in the number of clothes sent back to retailers has caused issues with both costs and with environmental goals, but without something changing, it’s a trend set to continue.
Over 43 per cent of shoppers now buy with the intention of returning, says CEO and co-founder of returns specialist Zigzag, Al Gerrie, said.
“A couple years ago, that was below 30 per cent… through the pandemic, it has grown significantly as people get more comfortable shopping online, and they understand the need to buy different sizes,” he says.
Issues with sizing are well-known in retail, with no uniform policy across brands – in fact, there are often huge variations.
Then there’s over-ordering, wardrobing – trying on a product and taking a photo for Instagram, then sending it back – and occasionally flat-out fraud.
All of that combines to make a serious headache to retail, with only four-fifths of returned products resellable at their original price.
“The return to sender phenomenon is no longer a minor backend issue… It’s a frontline challenge impacting customer satisfaction and profitability,” Martin Lockwood at Manhattan Associates says.
A recent survey found that UK retailers lose around £5.2bn annually due to online returns alone, and nine out of 10 UK retailers have experienced an increase in the rate of returns fraud or policy abuse in the past 12 months, according to Loop Returns.
“It’s going to hit consumers in the pocket in terms of, they’re going to have to pay more for their items over the longer term,” Gerrie says.
Tiktok is ‘equivalent to QVC’
Many of the issues with returns seem to be an online problem, with millions of products to choose from and no ability to try them on fuelling buyers remorse.
But Tiktok is a special culprit due to the type of shopper it attracts.
“What we tend to find is that Tiktok is a younger shopper… You get quite a lot of impulse buys.”
“It’s equivalent, I would say, to the old QVC buying in the middle of the night,” Gerries says.
It’s also notoriously quick, both through its user experience and its shopping experience.
Trends comes and go at breakneck speed, sometimes within a matter of weeks.
“With fast-paced trends, it’s down to speed: If an item doesn’t arrive quickly, that urge to buy has sometimes disappeared.
“If you’re waiting three or four weeks for the product, you’ve almost probably forgotten you’ve bought it, and sometimes people just send it back because they’ve changed their mind,” Gerrie says.
What are retailers doing?
There are two broad ways to turn the issue around: A retailer can change their returns policy, or the industry can encourage shoppers themselves to change their behaviour.
So far, retailers have gone for the former. Asos, H&M and Zara made waves last year when they started charging serial returners, although the move didn’t initially go down well with their bases.
But the returns process for retail is as much about ease as it is about cost.
“It’s not just about processing items,” Lockwood said. “It’s about preserving customer relationships and recovering lost value. A smooth, transparent, and efficient return process can turn a potential negative experience into a positive one, helping foster long-term loyalty.”
But there’s only so much retailers can do, particularly if shoppers are returning high volumes of clothes at once.
Gerrie is an advocate of regulatory change, starting with uniform sizing across retail.
“[It] would need to be an industry wide, government and or multi-government led solution where the industry gets together and says, right, we need to solve this problem,” he says.
While an online avatar which tries your clothes on for you is a possibility, the tech is still not ready and might never be able to replicate trying something on.
A tax on waste is another possible solution, and “inevitable”, he says. “We have seen massive drops in the use of plastic since [plastic waste] taxes came in.
“The retailers that are being hit with those fines will go back to their manufacturers and insist on better sizing or insist on some more collaboration, as you say, but it needs to start at government level.
But we’re still “some years away” from any structural change, he says.
“Governments have other things to concentrate on right now, and that’s probably not a high priority.”