According to recent statistics, customers are buying more clothes online than ever. However, for retailers, increased sales don’t always translate into sustainable top-line growth. One reason for that is that online clothes shopping has a big problem: returns. Research shows that e-commerce apparel returns can range anywhere between 50% to 80% compared to in-store return rates of just 5% to 15%. That’s a big difference — and is something that can seriously damage the profitability of online fashion brands.
The rate of online returns in the fashion industry is so bad that in 2019, Forbes called it “an epidemic.” This was before the COVID-19 pandemic entered the scene and sparked an increase in online shopping. Since then, retailers have had to handle an even higher volume of returns. But they’ve also had to deal with customers who are hesitant to buy online in the first place. According to one study, since the pandemic started, 40% of consumers have held back from shopping online as a result of complicated returns processes.
One potential solution to this problem comes from augmented reality (AR), a technology that enhances parts of the physical world with computer-generated elements. Already popular across a range of industries, from travel and food to automotive and furniture, AR is changing the way that customers shop online. Three-quarters of customers now expect retailers to offer an AR experience, with brands that have invested in 3D and AR technology seeing a 40% decrease in returns and a 66% increase in customer engagement.
Thanks to its virtual try-on capabilities and fun social media effects, AR is clearly on track to redefine the fashion sector. Eyeglasses, hat, jewellery, and shoe retailers are already empowering their customers to visualise their products with AR and 3D before purchase. And even though body tracking is less advanced than face tracking, many clothing and fashion retailers are beginning to use AR and 3D to showcase their products.