Fashion Brand

THE PROJECT:

An online DTC fashion brand came to us looking to increase their profitability. Sales were already strong and customer loyalty was high.

Digging into the company data, the problem was obvious - around 30% of all orders were being returned. Looking into the reasons for the returns showed us that the majority of returns were due to sizing issues. To compound the problem, due to customers ordering multiple sizes, nearly all orders qualified for free shipping as well as the brand offering free returns. This is great for the customer, but was really hurting the brands bottom line.

Now, this is not uncommon for fashion brands, however we knew that we could reduce this number significantly with better sizing guidance, a review of the free shipping threshold, and a different approach to the returns experience.

Here's how we did it:

Customers were unsure of sizing across the ranges, so we implemented a true to life sizing guide (no more relying on standardised sizing), measuring all of the garments as well as allowing customers to feedback on fit, displaying this on the product page.

We amended the returns process, offering free return shipping for exchanges or customers opting for store credit over a refund. The combination of these tactics meant that rather than ordering multiples sizes of the same item, the customer was assisted in making the right size choice for them first time.

As a result returns dropped by over 50%, saving multiple thousands of dollars in shipping and handling fees.

Finally we reviewed the brands free shipping threshold. The store had been using Shopify's average order value metric to determine their threshold for free shipping, unfortunately this was misleading.

Shopify calculate their average order value, net of any discounts, meaning that your average order value might not be an accurate representation of what the customer actually pays.

Knowing this you can amend your free shipping threshold at a tactical number that encourages customers to spend that little bit more in order to qualify for free shipping.

Taking this approach helped minimise the impact on top line revenue caused by the reduction in revenue due to fewer items per order, stabilising the figure and giving a truer representation of the company’s cash position.

This project is a prime example of sacrificing top line revenue in order to make increased profit and build greater cash reserves. By reducing the amount of items in transit at any one time the brand can now afford to carry less stock, using available cash to invest in further acquisition strategies and grow at a faster rate than before.