Returns vs. Revenue – A Battle of Perspective

During the Covid-19 pandemic, we’ve learned a great deal about doing business remotely, managing staff working from home, or adapting the workflow to the client’s needs. It was a challenging period for everyone, but you might think that the owners of e-commerce shops were the lucky ones. Online sales got a boost, and the prediction of revenue for the stores was as good as it could be. But there was a missing piece in this puzzle, one that not many have thought of, which was prone to change this apparent balance: the returns.

Research on return policies is scarce and inconclusive. Many papers focus on customers’ behavior in cyberspace and how the owners can profit from this to maximize their gains. The general thought regarding the indulgent policies applied by the stores is that it’s another bonus for the business, as it should reduce the consumer’s risk and increase demand. In addition, acceptable returns create a marketing incentive to attract loyal customers and promote a safe space for acquisitions, where you can change your mind at any time. 

Unfortunately, this is not necessarily true, as a problem arises instantly in one’s mind: yes, free returns will mean multiple orders, but it will also mean that clients will take advantage of it and buy carelessly.

Despite the cost and prevalence of returns, most merchants offer a return policy hoping that the positive effect on demand will offset the negative impact on returns. Free return policies will never benefit retailers in terms of long-term profitability. There is also the option of an indulgent return policy with a reduced cost. Loyal customers will generate a higher contribution per order in this case, as they will think twice before acquiring any item and will be more likely to keep it.

The decision to buy clothes is closely related to the feelings of individuals about themselves, their body image, and the image they want to project to others when they are wearing them. There is a new trend among customers: buying multiple sizes of the same item to keep only one. Combined with lenient return policies, this will have a significant impact, whether we are talking about a small store or a larger one. We can also understand the customer side, as shopping online gives them the luxury of time but not the luxury of trying things out. However, some research cited in The Economist suggests that the company’s profit would increase by 50% if it were not for the costs associated with returns.

We’ve seen the issues and the impact, both on clients and owners, but which would be the best way to conciliate them? Applications that guide the buyers to choose the right size for them are the innovation in the industry, which can make a difference for both parties.

Esenca EASY FIT is the best sizing tool available on the market. Easy to use – as the name suggests – and to manage using our innovative dashboard, it is the fastest instrument to find the right size in seconds. You only need to add your data once (meaning only the height and weight) and will sync it with all the items in the shop. This is a massive breakthrough for the apparel world and an excellent opportunity for shop owners to access a technology that was only a sweet dream just a few years ago.


Welcome to esenca

Welcome to Esenca Spotlight. We are researching and developing great State of Art Artificial Intelligence, Machine Learning, and Computer Vision techniques that we use in measuring the human body from images. These technologies have many other use cases in health, fitness, sports, and security.

Since this is our first post, we will briefly describe what we have achieved until now, and in other posts, we will keep you updated with our progress, products, and future developments.

In early March 2020, we gathered for the Innovation Labs Hackathon, held at Politehnica University of Bucharest. We had access to guidance from the organizers. We were selected to advance to the final round, where we won the Best Scale Up award. Since then, we have developed an exact solution for measuring the human body, having a margin of error of 0.5 cm and a processing time of a few seconds.

The whole process is as simple as possible for the end-user; a short tutorial describes the measuring process. Using our user-friendly design, it inputs some data (age, weight, height, gender). An advanced AI virtual assistant will guide the user to the optimal position in the camera frame with visual and audio cues (“move further away from the camera,” “slightly raise your hands,” etc.). Thus, it will take two photos of the user, one with him front facing the phone, the other on the side. Together with the data offered by the user, the two photos will be processed on our servers, and in a matter of a few seconds the result is given to the user. 

It is essential to mention that we have three products, for different needs at the moment. 

ESENCA EASY BODYFIT – our essential product, which completely bypasses the photos and relies solely on the metadata inputted by the user. This product is for primary use, where taking images is not desired or required. 

ESENCA PERFECT BODYFIT is our advanced product, which relies on metadata and images to measure with improved performance. Once the measuring process is done, the user gets the size for each piece of clothing from a particular shop.

ESENCA TAILOR BODYFIT – our most advanced product, which relies on metadata and images, where the user receives detailed values for more than 100 measurements of the body. This product is dedicated to tailors, rendering them capable of measuring people remotely.

And bam, you can get the exact size for any piece of clothing in any shop just like that; either you want to take photos or just want a simple but highly accurate fit predictor. And if you have a favorite tailor or want to try a famous tailor far from you, you can benefit from their services without having to leave your home.

After measuring your body, we can recreate a 3D model with your measurements so that you can see your virtual body. Furthermore, we are developing a virtual try-on, where you can see how clothes of different sizes and materials will fit you. Stay tuned for our progress in our next blog post. Also, follow us on LinkedIn, where you can find visual sneak peeks.