The opportunities available to fashion retailers within the fashion industry are enormous. In 2017, 74.4 billion parcels were delivered to online shoppers, that is almost 40 per annum for each online shopper on the planet. But on the flip side if expectations are not correctly “fulfilled” it can have major cost implications, ie frequent returns.
Warehousing, last mile delivery and reverse logistics (i.e. returns) present significant challenges to any company - solution design, cost control and process monitoring to name just three. In the fashion industry, returns have a massive impact on profitability. Almost half of e-commerce fashion shops report a return rate of between 25 and 50%, the highest rates of any B2C e-commerce sector. 23% of these returns derive from the wish to try on different sizes.
At the same time actual delivery time, the ‘unwrap experience’ and return policies and practices are an important part of the customer experience. Customers are expecting more each year. Therefor keeping track of wishes as well as feasible solutions is important for your conversion and loyalty rates on the one hand and economics and efficiency on the other.
Cross-border fulfillment refers to the integrated warehouse, delivery and return solutions companies put in place to service their international clientele.
THERE ARE TWO BASIC MODELS:
- cross-border shipment (sending directly from your native warehouses)
- cross-border fulfillment (sending items from multiple warehouses closer to your clients).
Working with international depots reduces your delivery times, as well as your cost of last mile delivery. It may also reduce the cost of customer service as customers are less likely to inquire about delivery.
However, cross-border fulfillment normally requires that you hold more stock, leading to higher warehousing costs.
As a rule of thumb, if you are delivering 1000 or more units per month to a country or region, consider a local warehouse. At these volumes, the benefits will start outweighing the extra costs.
For fashion retailers, it will not come as a surprise that there is no ‘one size fits all’ solution. Some smart A/B testing and financial modeling will go a long way to find the best choices for your company.
A trusted and low-cost return service solution through a free return or a local returns address really does make a difference, so much so that Amazon and other marketplaces now make this mandatory.
Use one local returns address for all your returns in one country, even if you use different last mile delivery solutions or sales channels. It will reduce your overall return costs and headaches.
Consumers return products less quickly if they receive a longer return period. There are several reasons for this:
Download the CheckOut 4 Fashion Guide to selling fashion around the world online: