Why Online Shopping Giants Are Turning to AI to Reduce Returns

Title Why Online Shopping Giants Are Turning to AI to Reduce Returns

As online shopping continues to dominate the retail landscape, e-commerce giants are recognizing the importance of artificial intelligence (AI) in reducing returns. From sizing advice via selfies to robot stock-takers, AI-powered solutions are helping retailers curb the financial burden of returns.

The Return Problem A Sizing Issue

According to a McKinsey and Business of Fashion study published in 2024, up to 30 percent of fashion items bought online are sent back due to sizing issues. This not only affects profit margins but also increases the costs associated with processing returns, which can range from $21 to $46 per item on average.

Sizing Up AI-Powered Solutions

Zoe Tournant, founder of Fringuant, a French startup that offers an AI-driven algorithm for sizing, notes that 70 percent of returns are linked to sizing issues. Her company's solution uses customer height, weight, and a quick selfie taken on their phone to provide a more accurate size recommendation.

AI-Powered Sizing The Future of E-Commerce?

With seconds, the algorithm matches the customer's dimensions with the garment's measurements provided by the brand, offering insights into fit. Tournant claims that her company's clients, including upmarket womenswear label Maje, have seen a significant drop in returns since implementing the solution.

Beyond Sizing AI's Role in Reducing Returns

E-commerce companies are also leveraging AI to prevent returns caused by shipping errors and automate their stock counts. At ID Logistics, for instance, smart cameras on order pickers' trolleys check that products match orders, reducing incorrect parcels by 90 percent in less than two years.

The Power of AI Streamlining E-Commerce

Additionally, autonomous robots are processing 6,000 to 30,000 pallets per night, updating stock levels based on visual data. This helps prevent preparation errors and returns. As Ludovic Lamaud, ID Logistics director of Development and Innovation, notes, The right stock prevents preparation errors and therefore returns.

Conclusion

In today's e-commerce landscape, AI is playing a crucial role in reducing returns for online shopping giants. By implementing AI-powered sizing solutions, shipping error reduction, and automated stock counts, retailers can reduce costs, improve customer satisfaction, and increase profitability. As the world of e-commerce continues to evolve, AI will undoubtedly shape its future.

Keywords AI, E-commerce, Returns, Sizing, Shipping Errors, Stock Counts

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.