A study highlights the profound challenges that product returns pose for Sweden’s booming e-commerce sector, impacting both profits and the environment.
A recent examination into the challenges facing the Swedish e-commerce sector has brought to the forefront the significant issue of product returns, an intricate problem that both affects profitability and has broader environmental implications. Anna-Maria Petisme, a researcher from Borås, has been closely studying this phenomenon and its consequences within the retail landscape.
In her research, Petisme notes that online sales of clothing and shoes in Sweden reached an impressive 20 billion kronor last year, marking the second-highest figures recorded in e-commerce history. However, with this growth, a major challenge has emerged: the high rate of product returns, which can reach up to 50 percent for some retailers. Such a statistic reveals a stark reality for fashion giants, as these returns lead to rising shipping costs and significant overproduction. Petisme stated, “There is so much research that shows returns dampen profitability for companies, and just as much research that shows it is an environmental problem.”
Petisme’s interest in the return issue began during her tenure as an industrial doctoral student at Pulsen retail, where she focused on digital trade. She embarked on a journey of interviews with employees from seven different fashion companies, many located in the Sjuhärad region. Through this qualitative research, she discovered that sustainability managers within these companies typically prioritize production issues over the return problem. “The share of e-commerce in total trade has increased, leading to a proportional increase in returns,” she explained, referring to data from the E-commerce Barometer, which indicated that e-commerce generated 140 billion kronor in 2024, with clothing and shoes accounting for a significant fraction.
The current return policy landscape, characterized by free shipping and free returns, has fostered a culture where consumers order more products than they intend to keep. This practice prompts retailers to overstock items, resulting in an excess supply that often goes unsold, contributing to environmental waste as many garments are discarded rather than recycled or reused. Petisme articulated the frustration of her findings by questioning, “When you describe the situation, it becomes clear that this is a huge problem. Everyone has something to gain from improvements. Still, no significant change occurs. Why? There’s a fear of losing customers.”
Petisme does not attribute the return issue solely to consumer behavior, instead contending that the current operational dynamics are dictated by the companies themselves. She believes that if systemic changes are to happen in how returns are managed, companies should take the lead in implementing strategies to mitigate this problem. “The playing field as it exists today is drawn by the companies. Customers do what the companies want,” she remarked.
To address these challenges effectively, Petisme advocates for legislative measures that apply uniformly to all retailers. Without regulation, individual companies may hesitate to change their return policies for fear of losing a competitive edge. Her research underscores a complex dilemma wherein the freedoms offered to consumers in purchasing fashion online create significant repercussions for companies and the environment alike.
In light of Petisme’s inquiry, one thing remains clear: while the e-commerce sector continues to thrive, it must reckon with the financial and ecological costs tied to consumer returns, prompting a reevaluation of existing practices and policies within the industry.
Source: Noah Wire Services
