The return rate of women's clothing e-commerce is 80%. Who is being driven crazy?

The high return rate in the women's clothing e-commerce market has become a problem that cannot be ignored in the industry. The return rate of up to 80% not only makes merchants feel frustrated, but also reflects the challenges and difficulties faced by the entire industry. This article will explore in depth the reasons for the high return rate of women's clothing e-commerce, as well as the possible impact of this phenomenon on merchants, consumers and even the entire industry.

"I sell 1 million and get 700,000 to 800,000 returned. This year I have been shipping non-stop and receiving returns non-stop. I have to re-iron the clothes and ship them out again. But when I look back, I still have a lot of inventory left," a women's clothing e-commerce merchant told Tech Planet. This year, the overall return rate of women's clothing has increased by about 20%. For small and medium-sized merchants like her, as long as they don't lose money, they are considered to have made a profit.

This is not an isolated case. Since the 618 Mid-Year Shopping Festival, discussions about the high return rate of women's clothing e-commerce have been high. In particular, Taobao women's clothing store "Girl Kayla" owed more than 300 suppliers and was suspected of running away. Douyin women's clothing store "Lola Code" announced that it would stop broadcasting and close the store. Their stores have millions of fans, and the former's annual sales volume once reached more than 1 billion, and it also won a major award at the Milan International Fashion Week.

With the collapse of the top brands on these platforms, more and more women's clothing merchants found that they couldn't make up their minds. They posted their backend data on social platforms one after another. The more they sold, the more they lost.

On the other hand, consumers also feel helpless. They complain that the clothes they received are "not the same as the ones described". Merchants set up a variety of pre-sales, the prices of clothes are increasing, but the quality is getting worse and worse.

What exactly happened to women's clothing e-commerce behind the soaring return rate?

1. Soaring return rate of women's clothing, collapse of merchants

"This year, we are losing money selling products with low and medium customer prices. We can't bear it at all," Zhang Yuan, who has been running a women's clothing e-commerce business for five years, told Tech Planet that the biggest challenge is the sharp increase in operating costs.

Taking freight insurance as an example, Zhang Yuan introduced that merchants used to pay 0.7 to 1.5 yuan for one order of freight insurance, and the cost of issuing 1,000 orders was up to 1,500 yuan. This year, the cost has doubled, and 1,000 orders generally cost 4,500 to 5,000 yuan. If the store sales are higher, the daily freight insurance cost will be tens of thousands of yuan. The cost of traffic is also increasing. Now the promotion cost behind each sale is about tens of yuan, and the promotion fee for selling 1,000 orders will also be tens of thousands of yuan.

In the past two years, major e-commerce platforms have paid more attention to user experience and competed for existing user traffic. When consumers pay more attention to high cost performance, e-commerce platforms also place low-price strategies in a more important position. For example, Taobao, Douyin and other platforms have successively launched price comparison systems, from the platform to the multi-dimensional comparison of the entire network. The lower the merchant's price, the more opportunities to obtain traffic and exposure. Reflected on the consumer side, when they buy a product, the platform will push similar products with lower prices to them.

There are many businesses that choose to use inferior fabrics to make clothes in order to lower prices and save costs, resulting in a significant increase in product return rates.

On the other hand, e-commerce platforms are also rolling out services and establishing a more complete after-sales mechanism. Whether it is applying for membership of an e-commerce platform or using the freight insurance provided by merchants, the threshold for users to return goods has been greatly reduced.

There is also the introduction of a "refund only" mechanism, which was originally intended to reduce disputes and conflicts between merchants and users over quality and return issues, but it is now causing some merchants a headache. For example, some "wool-pulling parties" take advantage of this loophole to make malicious refunds for profit, and there are even special training classes that charge a fee to teach refund and wool-pulling techniques.

Zhang Yuan described the refund as "a matter of chance". In his opinion, it depends on the level of responsibility of the store's reviewer. Some of the reviewers are outsourced employees of the platform. They just approve the refund without any pictures or videos. For example, in Zhang Yuan's store, some users wrote a quality issue as the reason for the refund, and the refund was approved in seconds without providing any pictures or videos as evidence.

In addition, the live broadcast room has further increased the return rate of women's clothing. Women's clothing anchor Miao Miao told Tech Planet that unlike many e-commerce promotions, merchants must provide shipping insurance to be eligible to participate. In the live broadcast room, shipping insurance is a "bargaining chip" for many anchors to guide users to place orders and increase sales. Usually, the anchor will remind users in the live broadcast room, "It doesn't matter whether it fits or not, buy it home and try it on first, and buy it boldly. You can return it with shipping insurance."

Miaomiao said that in her live broadcast room, a consumer would usually buy clothes of multiple colors and sizes at one time, and finally return them all, or keep the most suitable one. The live broadcast room itself is an impulse purchase, and the return rate is higher than other channels. A return rate of 80% is very common.

“For anchors, live broadcast data comes first. Even if costs such as freight insurance have increased, only good data in the live broadcast room can attract traffic and sell more later. We would rather users buy and then return than not place an order,” Miaomiao added.

2. Long pre-sale period, more tricks

In order to cope with the high return rate, many merchants have begun to set a pre-sale period, and the longest period allowed by the platform is generally 15 days. In the past, merchants could manage warehouse inventory more flexibly through the pre-sale period, and had enough reaction time to determine how many clothes should be produced, thereby reducing inventory backlogs and reducing costs.

Now, with the return rate of women's clothing soaring, the pre-sale period has become an important way for merchants to reduce return costs. Nuomi, an e-commerce merchant of women's clothing, told Tech Planet that the inventory numbers that consumers see are all false numbers marked by merchants. For example, if a single product sells 1,000 pieces in a live broadcast, the merchant will only stock 500 pieces based on a 50% return rate. With a 48-hour delivery speed, a batch of orders are generally returned by users every other night.

This is almost an open secret in the industry. Nuomi said that during the pre-sale period, merchants use batch delivery. As long as the first batch of returned clothes are not dirty or torn, they will be re-ironed and repackaged before being sent to the second batch of users. Moreover, if the consumer receives the goods earlier than the pre-sale period, the merchant will also say "we rushed it for you as soon as possible."

However, during the past two years of promotional events, e-commerce platforms have consistently simplified processes and provided users with a better experience. In particular, during this year's 618, Taobao, JD.com, Kuaishou and other platforms officially announced the cancellation of the "pre-sale model" that had lasted for 10 years, using "simple and direct" as a selling point to gain more sales and traffic. Merchants who wanted to reduce the risk of returns through the pre-sale model were caught off guard.

In addition, behind the high return rate, some merchants want to maintain their profits and begin to cut corners on production details such as materials and tailoring, or increase product prices, indirectly transferring the cost of returns and exchanges to consumers.

Miao Miao, a female clothing anchor, revealed to Tech Planet that the clothes worn by anchors in some merchants’ live broadcast rooms are made of high-end fabrics, but the actual mass-produced goods for users are made of relatively inferior fabrics. In addition, the clothes worn by anchors are usually clamped with some clips to better modify the shape, and there are beauty filters in the live broadcast room to achieve a better display effect. This will cause users to buy and wear them, but return the goods if they do not meet their ideal requirements. Miao Miao said that among the reasons for refunds given by merchants in the backend, the main reason is that the goods are not the same as the pictures.

Some merchants will use inferior fabrics to increase profits, which will eventually lead to bad money driving out good money. After a dress in Zhang Yuan's store became a hit, it was quickly copied by other merchants and sold at a lower price, while accurately targeting target users. Zhang Yuan said that now these copycat merchants can quickly produce and put the same product on the shelves within a week at most, and the life cycle of popular clothing has also been greatly shortened, and can only last about a month.

If the copycat merchants have supply chain advantages and can get the lowest purchase price, the price of de-rolling is not bad, then everyone is competing on supply chain capabilities, but more merchants use inferior fabrics to pass off inferior products as good ones, with the same style at a lower price, user complaints intensify, and product reputation collapses. Zhang Yuan said that this has led to the interception of his store's popular products and it will be more difficult to sell them in the future.

Behind a series of operations, merchants saved costs but sacrificed product quality, and consumers also received more and more unsatisfactory clothes. They complained that no matter how many times they returned the goods, they could not buy the product worn by the model in the store. The size was wrong, the workmanship was rough, and the style was wrong. A lose-lose situation thus entered a vicious circle.

3. Who will be the first to be reshuffled under the internal circulation?

Wang Lu, a women's clothing e-commerce merchant, believes that as the women's clothing e-commerce market involutions, small and medium-sized merchants and large sellers with medium and low customer unit prices are more affected. The former mainly refers to merchants who rely on stalls or factory development for new products, while the latter refers to stores with a relatively high level and a large number of daily orders. When the blowout sales and return rate come at the same time, it is easy to break the cash flow in a short period of time.

Wang Lu calculated the costs of his store to Tech Planet. The freight insurance plus freight cost for 100 pieces is 100*3.5+100*4=750, plus the packaging labor cost is 100*2=200. The postage cost for selling 100 pieces is 950 yuan. However, 70 pieces have to be returned for every 100 pieces sold, which is equivalent to only 30 pieces sold. This means that the actual cost of sending an order is more than 30 yuan. Many merchants with lower average order values ​​are losing money no matter how you calculate it.

Moreover, clothing merchants usually come up with a design draft first, then make a sample, and finally take photos and videos. However, in order to save costs, small and medium-sized clothing merchants now directly hang factory pictures in the store. They have never seen the real pattern, and finally, when the goods shipped from the factory reach the hands of users, the color difference and style are far from the picture.

Wang Lu said that if the pictures are not provided by the manufacturer, but one goes to the manufacturer to get sample clothes and asks someone to take pictures or takes the pictures by oneself, the usual shooting process includes a separate main picture, SKU picture, detail picture, function and selling point. These are combined together to design a layout, which is the details page, and finally some style design matching is done. The cost of shooting a style is about 400 to 600 yuan, and many merchants with low customer unit prices cannot afford this part of the cost.

This is also one of the reasons why consumers of women's clothing now have a worse experience. Many users complain that women's clothing stores now only have one model picture from the first picture to the details, and even the basic parameters of the clothing are not provided. The purchasing experience is greatly reduced, and the probability of the goods not being the same as the picture is naturally greatly increased.

In addition, Wang Lu also said that after the e-commerce platform launched the price comparison system in the first half of the year, merchants who directly obtain pictures from manufacturers will also be more affected.

This is because, for a picture, the factory may give it to thousands of merchants at the same time. If the merchant wants to break through the competition, it will test the supply chain resources of the merchants. If the merchant can get the goods at a lower price and has the ability to obtain a lower price and gain more traffic and exposure, he will be able to break through.

On the other hand, it tests the stability of merchants' stock. When a style becomes a hot product, sales soar and they all go to the manufacturer to supply goods. There is also a priority order. The manufacturer first supplies to large customers with higher sales, followed by small customers. If the delivery is delayed or the user clicks to urge delivery, the e-commerce platform will also have corresponding punishment measures against the merchant.

Compared with white-label products, a marketing manager of a leading clothing brand told Tech Planet that the brand's advantage lies in building a certain amount of private domain traffic and having a group of customers with a high repurchase rate. Usually, the return rate is relatively high during the brand's discount season. Brands will set discount levels for different tiers in a concentrated period of time, but now many users want to get the lowest price, so they will make multiple purchases during this period and finally keep the cheapest price, so they often receive boxes of returns from users.

Overall, as the degree of e-commerce involution intensifies, the constant game between platforms, merchants, and users has magnified the return rate of women's clothing e-commerce. But at the same time, why are consumers unwilling to keep the goods after they get them? Solving these problems is the key to the long-term development of women's clothing online stores.

(Note: All names in this article are pseudonyms.)