The women's clothing return rate is 80%, what is the problem?

E-commerce newspaper Pro

2024-06-20 10:26Posted on the official account of Guangdong E-commerce News

An e-commerce women's clothing merchant complained that the return rate was as high as 80%

The vigorous 618 has come to an end, although many brands have created considerable sales in 618, but we can find that there are some merchants who have different attitudes towards 618.

Recently, according to netizens, the women's clothing online store run by his friend sold nearly 10 million yuan in sales in 618, but the store will eventually face a loss of 50 to 600,000 yuan. This phenomenon is in stark contrast to the high turnover.

A key factor in this dramatic loss was the return rate, which reached a whopping 80%.

Of the revenue, 3.5 million yuan was refunded only, and the other 3.8 million yuan was returned and refunded, totaling 7.3 million yuan, almost engulfing most of the turnover.

Source: Little Red Book

In recent times, the women's clothing track has been full of twists and turns.

Taobao merchant "Girl Kayla", an online store with more than 5 million followers, suddenly closed last month.

On May 12, the store was still broadcasting normally, but by May 13, its office was closed and its warehouse was found empty.

In the early morning of May 14, the store was completely unsearchable on the Taobao platform.

Source: Taobao

The amount involved in the incident is as high as 35 million yuan, which is mainly owed to 300 suppliers.

Although the boss said that he would repay the money, reached a settlement with some suppliers, and repaid 20% of the arrears, the turmoil still shook the industry.

Recently, another e-commerce women's clothing giant announced the closure of its stores.

"Lola Code", which has more than 5 million followers on Douyin, once ranked among the top five women's clothing stores on the platform.

With its unique original design, accurate market positioning and efficient live streaming capabilities, this store has created an annual sales of billions of yuan on Douyin.

However, coinciding with the critical period when major merchants were actively preparing for the 618 mid-year promotion, "Lola Code" suddenly announced the suspension of broadcasting and the closure of stores.

The founder of the brand, Lola, responded that the main reasons for withdrawing from Douyin were cost control and market environment considerations.

Source: Douyin

The withdrawal of this series of leading stores has undoubtedly released a strong signal to the outside world: high return rates, tight capital chains and uncertainties in the market environment are forcing some merchants to re-examine their business models and market strategies.

What is behind the "hardest" 618

With the increasingly fierce competition of live broadcast e-commerce, the competition for users between platforms has entered a white-hot stage. In this context, in order to attract more users and increase transaction volume, platforms often encourage price reduction competition.

For example, Pinduoduo has launched an "automatic price copy" function, which monitors competitors' price changes in real time to ensure that product prices are always competitive.

In addition, Pinduoduo has also adjusted the search recommendation rules during the 618 period, and the weight of the site-wide traffic of all price-reduced products will be increased, up to 9 times, to encourage merchants to reduce prices and promotions.

At present, the internal competition in the e-commerce industry is fierce, and the platform encourages low-price strategies, and merchants are involved in price wars, and profits are damaged. At the same time, the high standard requirements of e-commerce platforms for after-sales service, such as "freight insurance" and "refund only" policies, also further increase the cost burden of merchants.

And we can also find that other topics that have emerged on Weibo - "1.65 meters women complain that they need to cut edges to buy 3 pairs of pants", "women's tops are like children's pants but they are getting longer and longer", etc., all reveal everyone's complaints about the size design and quality of the goods.

Some people say that there is a huge gap between the model pictures displayed by the merchants and the actual products, and there is a large gap between expectations.

Source: Little Red Book

The product is exquisitely advertised, but the physical product does not meet the expectations of consumers. This complaint is not uncommon on social media.

These problems not only lead to consumer dissatisfaction and high return rates, but also damage the reputation and profitability of the merchant itself.

In addition, under the topic of "an e-commerce women's clothing merchant complains about the return rate of up to 80%", there are many merchants complaining about the "white prostitution party" and "wool party". The existence of these people has further disrupted the market order, and they have taken advantage of loopholes in the platform's rules to carry out risk-free arbitrage or malicious returns, which has brought additional losses and operational pressure to some merchants.

Complaints from small businesses

Due to a variety of factors, some businesses are going through a difficult time.

In this case, first of all, when formulating rules, e-commerce platforms should not only protect the rights and interests of consumers, but also reduce pressure on merchants, so as to avoid excessive "one-size-fits-all" policies that bring unnecessary pressure to merchants.

On the other hand, the platform should encourage merchants to compete head-on through innovation and service improvement, strengthen the crackdown on false propaganda and fake and shoddy goods, and maintain a healthy and fair market environment.

This can not only block the erosion of the reputation of the market by bad merchants, but also eliminate the bad phenomenon of "bad money drives out good money", so that truly excellent merchants and products can stand out.

Secondly, the quality of the product is the foundation for the merchant to win the trust of customers. Brands should pay attention to raw material procurement, quality inspection and other links to ensure that products can meet consumers' psychological expectations.

Storecasting has become a new growth point

At present, content e-commerce has become a new growth point. And with the cooling of influencer live broadcasts, brand store broadcasts have become a major trend.

During Tmall Double 11 in 2023, Taobao will have 89 live broadcast rooms with a turnover of more than 100 million yuan, of which more than 70% are contributed by the live broadcast rooms of brand stores, 64 store live broadcast rooms have achieved sales of 100 million yuan, and another 675 live broadcast rooms have exceeded the 10 million sales mark.

Gujia Home Furnishing, Li Ning, Dreame and other brand store broadcasts have exceeded 100 million yuan for the first time, and store broadcasts have become an important driving force for merchants to promote performance growth.

Source: Taobao Live

The development speed of Dabo has slowed down, and store broadcasting will become the main force in the future.

The live broadcast of top and mid-waist influencers is often accompanied by a large-scale influx of traffic, especially during large-scale promotional activities, and this kind of centralized traffic exposure is effective for merchants who pursue short-term performance sprints.

However, at present, many platforms have a trend of de-heading, and the growth of top anchor traffic is slowing down, accompanied by high costs and risks. Moreover, the cost of broadcasting is high, cooperation is difficult, and it is not friendly enough to new brands and small and medium-sized brands.

Compared with the short and fast live broadcast of talents, store live broadcast focuses more on the long-term stream, gradually accumulating private domain traffic through stable live broadcast frequency and duration, and building the brand's own user pool.

Compared with the high cost of relying on top influencers, Shopcast allows merchants to independently control the cost of live broadcasting, and maximize cost-effectiveness through reasonable team allocation and resource allocation.

Merchants not only sell goods during the live broadcast, but also maintain and expand customer relationships, laying the foundation for subsequent refined operations and personalized marketing.

Especially for small and medium-sized businesses or businesses that focus on the long-term development of their brands, store live streaming is an effective way to build a brand moat and reduce customer acquisition costs.

Moreover, mainstream e-commerce platforms such as Xiaohongshu, Taobao, Douyin, and Kuaishou have launched incentive policies to guide merchants to store broadcasts and provide growth opportunities.

Xiaohongshu 618 incentives Source: Xiaohongshu official

But at the same time, storecasting also faces many challenges.

Self-built live broadcast teams require a large initial investment, including equipment purchase, talent recruitment, training, etc., and will experience a long trial and error period in the initial construction stage of the team, during which the cost consumption cannot be ignored.

In addition to store broadcasting, merchants also need to coordinate with short videos, big promotion activities and other aspects, which requires merchants not only to have sufficient staffing, but also to have excellent internal and external communication skills and comprehensive operation strategies, which undoubtedly puts forward higher requirements for the comprehensive capabilities of merchants.

The former is more suitable for the pursuit of short-term sales surge and rapid brand exposure, while the latter is more in line with the needs of long-term brand building and private domain traffic operation.

In the face of the rapid changes in live broadcast e-commerce, merchants can adopt a hybrid strategy of "focusing on store broadcasting and supplementing it with broadcasting", using the stability of store broadcasting to consolidate the basic market, and at the same time leveraging the explosiveness of broadcasting to quickly expand its influence and attract new customers.

The two complement each other and jointly promote brands to achieve the best commercial returns in the second half of the competition in live e-commerce.

Author | E-commerce Jun

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