To compete with physical stores, early e-commerce giants subsidized shipping and offered unconditional free returns. Consumers adapted by treating their living rooms as dressing rooms.
The reverse logistics nightmare
Shipping an item back, inspecting it, and restocking it often costs more than the item’s profit margin. In many cases, returned apparel is simply sent to landfills.
The end of the subsidy
Interest rates are up, and venture capital is no longer subsidizing unprofitable growth. Major retailers are now quietly introducing return shipping fees.
The push for precision
To reduce the return rate, brands are investing heavily in AR sizing tools and detailed fit metrics. The goal is no longer just selling the item, but ensuring it stays sold.