Global strategists Roland Berger has been selected by the British Fashion Council (BFC) to help solve the increasing problem of returns within the fashion industry.
The project is part of the work of BFC’s Institute of Positive Fashion (IPF) and is supported by its long-term partner – logistics company DHL. The initial findings and recommendations will be released before the end of the year.
Through the IPF, the BFC is working on a 10-year strategy to enable the industry to reduce climate and societal impact in line with UN goals and UK Government commitments. The strategy will comprise adaptation of business models and working practices across the whole industry.
Caroline Rush, chief executive, BFC, said: “We are delighted to work with Roland Berger to help find a solution to the direct and hidden costs and impact associated with returns in the UK. This project recognises the importance of investing in innovation to secure robust and profitable businesses, while safeguarding the planet and society.”
About 3% of returns cannot be resold and often end up in landfill and needless CO2 emissions are also generated, mainly through reverse logistics.
According to Roland Berger, there are also “hidden” costs, such as the 10% it attributes to the approval of returns that are fraudulent (e.g. wardrobing – buying with the intent to return after one wear).
“With online fashion expected to overtake bricks and mortar sales by 2024, returns present a serious challenge for the sector,” explained Siobhan Gehin, head of Roland Berger’s UK retail and consumer goods division.
“Every third item purchased online in the UK is returned, so this will cost the British fashion industry at least £7bn this year. Finding ways to keep value in the business and divert returns from landfill is essential.”
“We are extremely pleased to be working with the BFC/IPF to explore the financial, environmental and social impact of returns and provide solutions that mitigate the costs and impact on the environment.”