Stemming the Tide of Bad-for-Business Clothes Returns with AI
From sizing advice via selfies to robot stock-takers, online shopping behemoths have increasingly turned to artificial intelligence in a bid to stem the flow of bad-for-business clothes returns.
The Problem of Returns
Up to 30% of fashion items bought on the internet are sent back, according to a late 2024 study by consulting firm McKinsey and the Business of Fashion website – not least because "clients are buying several sizes or styles and returning most of them". This practice drags down profit margins. Each returned package costs between US$21 and US$46 on average given the costs of transport, treatment, and making the item fit for selling again, according to a separate McKinsey study.
Sizing Up with AI
Seventy percent of returns are linked to a sizing issue, said Zoe Tournant, whose company Fringuant markets an AI-driven algorithm to fix that, charging clients between €5,000-100,000 (US$5,250 to US$105,000) a year. Armed with the customer’s height, weight, and a quick selfie taken on the phone, Fringuant promises shoppers a better idea of what size would fit them best.
How It Works
Armed with the customer’s height, weight, and a quick selfie taken on the phone, the French-based startup promises shoppers a better idea of what size would fit them best. With the selfie, we detect their age, gender, to help "refine" the image of the customer’s body fed into its AI model, trained for a year on thousands of photos. Within seconds, that model is then matched up with the garment’s dimensions provided by the brand to tell shoppers whether a jumper "falls perfectly on the shoulder" or if there are "doubts at the level of the hips" for a pair of trousers. Tournant said her firm has some 20 clients, including upmarket womenswear label Maje, which she claimed has seen a dramatic drop in returns.
The Rise of AI-Driven Sizing
Similarly tempted by AI’s promise, Zalando acquired Swiss start-up Fision in 2020, one of a raft of companies working in the size-prediction niche. Since July 2023, the German heavyweight retailer has adopted its own AI-driven sizing tool where customers help avoid returns "by taking two photos of themselves with their phone while wearing tight-fitting clothes", Zalando told AFP.
Automating Stock Counts
Besides sizing, e-commerce firms are also counting on AI to help avoid returns caused by shipping errors and automate their stock counts. At ID Logistics, which operates in 18 countries, the order pickers’ trolleys are equipped with a smart camera to check that the colour or size of the product retrieved from the shelves matches the order. The device immediately alerts the worker if they have picked up the wrong item. In less than two years, this camera has reduced the number of incorrect parcels by 90%, explains Ludovic Lamaud, ID logistics director of development and innovation. Elsewhere in the warehouse, an independent robot "rammed with AI" likewise maps the premises to "update the stock according to what it sees", processing "6,000 to 30,000 pallets a night". "The right stock prevents preparation errors and therefore returns," said Lamaud.
Conclusion
As online shopping continues to grow, e-commerce firms are turning to AI to solve the problem of returns. By using AI-driven sizing tools and automating stock counts, companies like Fringuant and Zalando are reducing the number of returns and increasing customer satisfaction. With the potential to save millions of dollars in returns and the environmental impact of packaging and transportation, the use of AI in e-commerce is likely to continue to grow in the coming years.
FAQs
Q: How many returns are caused by sizing issues?
A: Seventy percent of returns are linked to a sizing issue.
Q: How much does each returned package cost?
A: Each returned package costs between US$21 and US$46 on average.
Q: What is the cost of Fringuant’s AI-driven algorithm?
A: Fringuant charges clients between €5,000-100,000 (US$5,250 to US$105,000) a year.
Q: How many clients does Fringuant have?
A: Fringuant has some 20 clients, including upmarket womenswear label Maje.