Off the beaten path: Tackling footwear returns for a greener supply chain

The Footwear Return Challenge: Fit, Fashion, and Footfall

Returns in footwear are driven by a potent mix of fit issues, hygiene concerns, and brand variance—some retailers estimate as much as 40% of online clothing and footwear purchases are returned. In the U.S., the average return rate for online apparel (which includes shoes) stands at 24.4%, totaling $38 billion in returned goods and $25.1 billion in processing costs for 2023. These numbers have only climbed during post-holiday surges, where over 850,000 items were returned—costing retailers $114 million between Boxing Day and mid-January.

A major driver? Poor fit and sizing ambiguity. McKinsey reports that 70% of returns stem from size or style mismatches, highlighting the need for better fitting tools and customer guidance (McKinsey).

Circularity Kicks Off: Is the Shoe Truly Circular?

Footwear complexity complicates recycling. Many shoes comprise multiple bonded materials, making circular design a challenge (Vogue Business). Attempts at fully recyclable shoes by brands like Adidas’ Futurecraft.Loop and Salomon’s Index.01 show promise—but are still early-stage experiments. Adidas shared only 10% of material reclaimed in early prototypes, while start-up Thousand Fell managed to recycle 80% of returned shoe material, yet only 30% of a new pair comes from old ones. This underscores that even circular innovations must evolve further to be scalable and impactful.

Returns as a Roadblock—or a Gateway—to Circularity

The challenge is that returns themselves are a hidden barrier to circularity: every unnecessary shipment and restock means higher emissions, wasted packaging, and lost value. According to Statista, footwear accounts for over 20% of fashion’s total returns, much of which ends up discarded or downcycled rather than reused. Here, technology makes the difference. On-the-spot condition checking, powered by AI-driven anomaly detection and quality forecasting, can immediately determine whether a returned shoe should be resold, refurbished, or recycled. By routing items faster and more accurately, brands stand to save millions annually in logistics costs, while also reducing waste streams and emissions.

4. Resale and Recycling: A Second Life for Sneakers

Allbirds’ Rerun platform is one practical example of resale in action: gently used sneakers are traded in for $20 in-store credit and resold at about two-thirds of the original price (Vogue Business). These models help extend product life, reduce waste, and form valuable local loops—critical for circular economies.

Smarter Size, Smarter Supply Chain

Technology offers hope in taming high return rates. Some retailers report a 10% reduction in size-related returns by leveraging virtual sizing tools and customer feedback loops Vogue Business. Academic research (at Cornell University) points to advanced AI-driven fit recommender systems, such as Bayesian models and deep learning that use customer reviews and other rich inputs to optimize fit prediction—reducing mismatches and returns in several markets.

Key Insights at a Glance:

• 24–40% of online footwear returns are due to poor fit and style ambiguity.

• Footwear represents 20%+ of fashion’s total returns, often disrupting circularity.

• Circular shoes are emerging, but only 10–30% of a new pair is reclaimed material today.

• AI-powered condition checks can turn returns into resale, refurbishment, or recycling streams—cutting costs and emissions.

• Virtual fitting tools reduce returns by 10%+, building customer trust and loyalty.