How All Your Clothing Returns Have Created A "Ghost Economy"

Photo: Getty Images.
Fitting rooms probably rank pretty high when it comes to undesirable places to chill (or spend any time in, really). And so we shop online, to shimmy into various sizes of jeans or deal with the prospect of a new bikini in the (likely fluorescent-lighting free) comfort of home. But the privacy and convenience may make e-comm shopping too easy, and a lot of apparel and footwear just ends up being returned. A largely unseen cost by retailers, factors like excessive returns lead to profit losses that were ominously dubbed "the ghost economy" by retail consulting firm IHL group last year. But 3-D modeling company Body Labs says the real reason for all this money going out the door (in pre-paid envelopes) is a poor fit.

Body Labs examined how customers’ shopping habits — and gripes — are contributing to an estimated $62.4 billion worth of apparel and footwear returned annually because of improper fit, according to IHL Group. The report found that 23% of all clothing bought online ends up being returned, and the stats are essentially the same for in-store returns (22% of IRL buys make it back to store shelves). According to Body Labs' research, 64% of those returns are due to lack of fit. That number climbs even higher when it comes to e-comm: 77% of respondents who shop online say poor fit is the biggest reason for returning clothing.

Other rationales in Body Labs' research include "poor quality," "did not like style," "changed mind," plus an "other" category, but these accounted for a paltry 3% to 17% of customers' replies, compared to that whopping 64% being fit-focused. The financial implications of returned garb are substantial, too: of the $642.6 billion in worldwide returns that happened in 2015, per IHL Group, defects or poor quality accounted for $162 million, while buyer’s remorse contributed to $88.7 billion in returns, and return fraud constituted $28.2 billion of bounced-back items. Yet $62.4 billion of merch that didn't remain in customers' closets was due to sizing issues — and of all of the above rationales for bringing back an item, poor fit is the factor retailers can, theoretically, have the most control over.

It's also a particularly timely shortcoming: Vanity sizing (brands intentionally slapping smaller sizes on larger garments, for some bizarre, unhealthy form of physical flattery) and inconsistent sizing from brand to brand continue to draw attention (and ire, in some cases) from customers. Granted, Body Labs has its motives for pointing out the issues with fit; the company does indeed shop its 3-D body modeling technology to fashion brands looking to improve the retail experience. So, any proof of problems in the current clothing-fit landscape, or of this "ghost economy" of abundant returns, is in the company's best interest. But fit drama absolutely is a prime reason we schlep or send back purchases that just looked so stellar on the hanger or in that detail shot online.

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