Virtual clothes fitting solutions reduce Black Friday returns

Over the years, the one day Black Friday event has evolved into weeks of aggressive competition between fashion retailers, all seeking to convince customers to spend money at their online shops. There is no secret that the most common tactic in this game is discounting.

As a result, customers have developed a natural expectation that there will be some form of discount or special offer in November, encouraging online shoppers to hold purchases until Black Friday events start. This is even more noticeable for high price item as cyber customers wait to evaluate what is the best value for money.

Black Friday is certainly one of the greatest marketer’s innovation for building audiences: Millions of people reaching the peak in their readiness to spend money and waiting for the offers to kick start the shopping spree. This time of year, has therefore become too big to ignore for any retailer regardless of their size as Black Friday has become the biggest revenue generating event of the year.

Winners of Black Friday

More and more e-commerce fashion retailers have become victims of their own success. While there is enormous amount of time being spent on building sales strategy around Black Friday, one key element is being missed by many, quickly wiping out the joy of record sales.

The major factor being overlooked by many is post Black Friday returns. Those who have been monitoring returns closely will have noticed that year on year growth of returns post Black Friday is growing at steeper rate than actual sales growth. This means that profitability for the special event is not increasing for everybody. Some online fashion retailers have hopes that profits will come later thanks to new customers acquisition over the course of the event and the potential for future sales. Unfortunately, this hypothesis remains to be validated and it is fair to assume that for most fashion e-commerce there is a significant risk to see their profitability shrinking year over year due to increased returns associated to Black Friday. With the final outcome being that the Black Friday event will most likely result in negative ROI even in long run.

Root cause of increased returns

There are many factors at play and influence customers’ purchase in this specific case. Black Friday is a very emotional and adrenaline fuelled experience for many online shoppers and retailers. Fashion retail marketers use very efficient tactics to create sense of urgency to trigger customer spending. For example, notifying shoppers that offers are only valid for limited period of time or while stock last. These strategies will make many people spend with limited comparison, research or even thinking more deeply if they really need the item or if it is actually going to fit them.

This artificial and impulsive buying decision leaves multi brand fashion retailer particularly exposed to the risk of significant returns rate post Black Friday. The facts are that every brand uses different sizing nomenclatures and size charts are not easy to understand while free shipping makes returns easy and safe. Leading customers to order immediately and leave decision making in terms of what to keep after clothes reach their home.

Virtual clothes fitting rooms solutions making Black Friday profitable

Firstly, retailer who have deployed virtual fitting solutions are boosting conversion ratio and average order value immensely. Thanks to instant personalised size recommendations being provided, online customers spend less time selecting multiple sizes for the same item, giving them more time to look at other items that will actually fit them.

Secondly, the provision of an accurate size recommendation will result in lesser items being returned.

Virtual fitting rooms solutions for online retailers significantly mitigates negative returns, leading to positive impact on profitability. Logistics and product handling costs are reduced as more garments in the right size are delivered to happier customers. Increasing customer satisfaction in their shopping experience also increases the likelihood that they will come back and shop again with the added confidence boost of trusting the size recommendation provided. Obviously, less merchandises are going back to the retailer after the online shopping peak period. Therefore, avoiding further discounting that would additionally impact profitability negatively.

Retailers who partner with true artificial intelligence sizing solutions and online fashion experts, have the unique opportunity to unlock new levels of profitability they could not have found without machine learning.

For example, one could optimise product pricing during Black Friday for maximum profitability. Many retailers simply look at gross margin and decide how much they are comfortable to sacrifice in order to attract customers, forgetting to take returns rate into account when measuring success of prior flash sales (mostly due to lack of analytical capabilities). Retailers are therefore missing on opportunities to optimise sales for profitability taking into account the full picture, which advanced AI and analytical solution suppliers like Prime AI can provide.