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How Online Shopping Giants Turn to AI to Cut Down on Returns

How Online Shopping Giants Turn to AI to Cut Down on Returns

How Online Shopping Giants Turn to AI to Cut Down on Returns



How Online Shopping Giants Turn to AI to Cut Down on Returns

The e-commerce landscape continues to evolve, with online shopping remaining a dominant force in the retail industry. However, this growth brings its own set of challenges, including a significant issue that many retailers face returns. According to a study by McKinsey and The Business of Fashion website, up to 30% of fashion items purchased online are sent back, resulting in substantial costs for businesses.

One of the primary causes of these returns is sizing issues. A staggering 70% of returns can be attributed to a sizing problem, making it crucial for brands to find innovative solutions to ensure customers receive the right fit from the start.

To address this issue, e-commerce giants are turning to artificial intelligence (AI) to curb returns and improve their overall customer experience. From size-prediction algorithms to robot stock-takers, here's how online shopping behemoths are leveraging AI to reduce returns

Sizing Up Sizing Issues Fringuant Leads the Way

French startup Fringuant is at the forefront of this movement, utilizing an AI-driven algorithm that uses customers' height, weight, and a quick selfie taken on their phone to provide them with a better idea of what size would fit them best. The algorithm is trained for a year on thousands of photos, allowing it to refine its understanding of the customer's body based on age, gender, and other factors. Within seconds, the model matches the garment's dimensions provided by the brand to offer shoppers personalized sizing recommendations.

Avoiding Returns Zalando's AI-Driven Sizing Tool

Zalando, one of Germany's largest retailers, has also adopted an AI-driven approach to reduce returns. They acquired Swiss startup Fision in 2020, which developed a sizing tool that helps customers avoid returns by taking two photos of themselves with their phone while wearing tight-fitting clothes. Since July 2023, Zalando has implemented this technology, allowing customers to get a better sense of what size would fit them best. This approach has proven highly effective in reducing returns and improving customer satisfaction.

Beyond Sizing AI's Wider Impact

While sizing is a significant issue in e-commerce, it's not the only problem that AI can help solve. Shipping errors are another common cause of returns. To combat this, companies like ID Logistics are using AI-powered cameras to check that the color or size of the product retrieved from shelves matches the order. These smart cameras have reduced incorrect parcels by 90% in less than two years, making them a valuable tool in the fight against returns.

Additionally, robots equipped with AI are being used to map warehouse premises and update stock levels in real-time, preventing preparation errors and reducing returns.

The Future of Industrial Design AI's Role

As we move forward into the future of industrial design, it's clear that AI will play an increasingly important role. With its ability to analyze data, predict outcomes, and automate processes, AI has the potential to revolutionize the way we design and manufacture products.

Whether through size-prediction algorithms or robot stock-takers, AI is helping e-commerce giants reduce returns and improve their customer experience. As we look to the future of industrial design, it's clear that AI will be a key player in shaping the next generation of products.

Keywords artificial intelligence, online shopping, returns, sizing issues, algorithm, selfie, Zalando, Fringuant, ID Logistics, robot stock-takers

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Edward Lance Arellano Lorilla

CEO / Co-Founder

Enjoy the little things in life. For one day, you may look back and realize they were the big things. Many of life's failures are people who did not realize how close they were to success when they gave up.

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