By: Shmuel Metz  | 

The Trillion Dollar Problem of Returning Your Joggers and How AI Can Help

Consumer spending is forecasted to grow by 8.1% in 2021 after a 3.8% contraction last year. But, more purchases mean more returns, which can be a logistical challenge for companies dealing with this unprecedented current of goods. With $428 billion in merchandise returned to retailers last year and 25% of returned merchandise non-resellable, businesses are looking for a solution to lower the costs involved. In coming years, as global e-commerce grows, “the amount of returns is going to be over a trillion dollars a year,” Tobin Moore, CEO and co-founder of reverse logistics technology company Optoro, said. The complication of returns is only growing in the oncoming years and companies are in need of a way to resolve this issue. 

Several solutions to product waste have already been implemented. Best Buy sells their returned items as open-box purchases for a lower price in “Best Buy Outlets” where slightly damaged major appliances are sold as well. Amazon's quality control measures ensure that products are in an acceptable condition to be resold. 

Although companies implement strategies that lower the cost of returns, some retailers are trying to stop the return before it happens.

According to dissatisfaction with size and style account for the lion’s share of apparel returns. To correct for this, companies use artificial intelligence in online fitting rooms, allowing shoppers to try on items without touching them. The platform works by overlaying an item on a live video feed of a customer to give customers an accurate picture of how the article of clothing will look and fit before they buy it. 

Zeekit, an Israeli based start-up recently acquired by Walmart, uses AI to show what a model with a similar body shape to the shopper would look like in a particular outfit. Zeekit even offers a feature in which shoppers can be their own models and virtually put the clothes on a 3-D image of themselves. “As a captain in the Israeli Air Force, mapping technologies used for intelligence missions inspired me,” Yael Vizel, CEO and Co-Founder of Zeekit said. “I could see another use for an image-processing algorithm to help people visualize. We eventually landed on using the technology to help customers with online shopping for clothing. We knew we could use the technology to layer detailed images of a fashion item over an image of the human body according to body dimension, figure and fabric. That led to the creation of Zeekit.” 

According to Shopify, 40% of shoppers are willing to pay more for a product if they could experience it through virtual fitting rooms and 71% of people are willing to shop at that retailer more often. That is why many big brands such as Adidas, Asos and Macy’s are rapidly adapting AI technology to their e-commerce platforms. 

Retailers hope that this platform will mitigate returns, thereby lowering logistical costs incurred by the company even before the products’ purchase.

One of the major concerns about this technology is the inability for customers to feel the product before they buy it. Without touching the fabric, many may still opt for the in store option to purchase clothing. Another concern amongst retailers who want to implement this technology is the minimal relevance it may have after the pandemic is over. It is unclear if shoppers will return completely to the in-store browsing when fear of covid-19 comes to a slow. Customers may also worry about the accuracy of the technology and if the item they saw online will look the same in person.  Even with some of the concerns about AI fitting rooms, Zeekit’s early data has shown its ability to slash returns by 36% and similar companies are hoping to drastically cut returns as well.

Picture Caption: As the pandemic ensues, in-person fitting rooms remain vacant 

Picture Credit: Unsplash