Fashion companies lack a returns management strategy

Returns management in fashion e-commerce is a systemic problem. This is according to Anna-Maria Petisme, who analysed the sustainability work of fashion e-commerce and recently presented the results in her doctoral thesis.

“Returns are often seen as ‘someone else's problem’. There is no coordinated strategy for returns management in many companies and instead returns are handled by different departments with differing goals and priorities, which leads to no one taking overall responsibility,” says Anna-Maria Petisme.

Returns have a significant environmental impact through transport and handling of unused products. If companies improve the way they present their products, create more thoughtful return policies and improve their analysis of customer behaviour, then unnecessary returns could be reduced.

“Research on e-commerce returns has often focused on consumer behaviour. My research sheds light on the business perspective and shows how decisions on product presentation, return policies and sustainability are influenced by industry pressures, rather than solely the companies’ own strategies,” says Anna-Maria Petisme.

Companies adopt policies that look good on the outside

Her project challenges previous research that focused more on individual consumer behaviour and shows that the solutions need to be systemic rather than just targeting individual customers.

“Companies implement policies that look good on the outside, but in practice have limited effect on reducing returns or improving sustainability,” says Anna-Maria Petisme.

Anna-Maria recently completed her PhD studies at the Industrial Graduate School in Digital Retailing (INSiDR), jointly run by Jönköping International Business School at Jönköping University, the University of Borås and the University of Skövde.

Norms and business models affect returns management

Anna-Maria's thesis is based on 40 in-depth interviews with managers and decision-makers in fashion e-commerce. In the interviews, she analysed the companies' product presentations, return policies and sustainability strategies, and their reasoning around returns and sustainability. She also analysed the challenges companies face and the trade-offs they are forced to make in practice.

“I have analysed how companies navigate between customer satisfaction, profitability and sustainability goals - three factors that often conflict with each other. My research explores why fashion e-retailers often use similar product presentation strategies and returns policies, and why there is a gap between sustainability promises and actual returns management practices,” she says.

“My research shows that returns management in fashion e-commerce is not just about individual customer behaviour - it is a systemic problem. Companies are driven by strong industry pressures. They adapt to customer expectations and competitor behaviour rather than developing their own sustainable solutions,” says Anna-Maria Petisme.

Potential to reduce returns

“It is possible to reduce returns by companies taking a holistic approach to the issue of returns and involving all parts of the organization in this work. It is also possible to reduce returns by working with data management and customizing strategies according to customer groups and product types,” says Anna-Maria.

The research results can provide fashion companies with insights into how to manage returns in a more sustainable and strategic way. But policy makers and policy developers as well as customers can also benefit from the results.

“By understanding why returns occur and how they can be reduced without compromising the customer experience, companies can both save money and reduce their environmental impact,” says Anna-Maria Petisme.