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5 innovative companies transforming the reverse logistics space

2022 Lead Innovation Summit featured the latest in retail returns solutions

From peer-to-peer returns networks to resale marketplaces, reverse logistics was on full display at The Lead Innovation Summit (Photo: Shutterstock)

NEW YORK — When it comes to retail returns, three out of five consumers are willing to bend the rules to their favor, according to a recent study from post-purchase platform Narvar. The reason? Returns are a hassle.

“Giving the choice and convenience to consumers on returns is equally important to what we see on the outbound side,” Amit Sharma, Narvar’s founder and CEO, argued to Modern Shipper.

According to Narvar’s research, one-quarter of customers purposely abuse retailers’ return policies, such as by falsely claiming an item was missing or damaged. Another quarter engages in wardrobing, the practice of buying a product with the intent to use it once or twice before returning it for full value. 

But it doesn’t have to be that way. Almost 40% of consumers said that if returns were more convenient, chances are they would do the right thing.

“If merchants can use the data to give that [convenience], then consumers may not abuse the policies as such, but retailers can also get genuine feedback,” Sharma explained.

This week, Narvar presented its findings to 1,700-plus attendees at The Lead Innovation Summit in Brooklyn, New York, a conference focused on the latest in retail and consumer tech. But it was far from the only company at the show with an eye on returns. The event drew a crowd of reverse logistics companies, and each had a unique solution to one of retail’s biggest unsolved problems.

The guest list

If The Lead attendees were looking for innovation, they found it on the returns side. Over two days, reverse logistics firms showed off innovative models including a nationwide meshwork of returns hubs, a countrywide peer-to-peer returns network and even a system that could eliminate returns entirely.

Narvar, for example, is focused on building a convenient online returns experience for consumers by allowing them to return a product in as few clicks as possible. You might be familiar with the interface if you’ve shopped brands like Gap, Levi’s, The Home Depot or Sephora.

While Narvar spends its energy making returns easier online, another attending company, Happy Returns, is simplifying the physical side. Owned and powered by PayPal, the firm has built a nationwide lattice of over 5,000 Return Bars, small hubs that let customers make box-free, label-free returns close to their homes.

Typically, shoppers need to return products either to the retailer they purchased from or to the carrier that delivered to them. But Happy Returns doesn’t discriminate. Its Return Bars aggregate returns across merchants and ship them together, which has the added bonus of saving the retailer money.

Read: E-commerce returns: Give the customers what they want

Read: Returns are causing a holiday hangover for retailers

But what happens after the product is back in the merchant’s hands? Recurate, another attendee, helps retailers get a refund on their refund. The company builds branded, fully integrated online resale platforms that make selling returned products simple and secure.

That’s important considering retailers throw away about a quarter of the returns they receive, meaning that value isn’t being recouped. The vast majority of those discarded products end up in landfills, which is never a good look from an ESG or sustainability angle, especially with consumers demanding sustainable practices now more than ever.

However, what if there was a way to resell without receiving the product back in the first place? That’s exactly what peer-to-peer returns startup Greenlist has in mind. At The Lead, the company explained how it can cut out the middleman entirely and deliver returned goods from the seller directly to the buyer.

“Our mission is to create the most sustainable approach to returns. One that reduces CO2 and packaging waste by sending returns directly to another consumer, instead of back to a warehouse or landfill,” Jess Owens, founder and CEO of Greenlist, told Modern Shipper. “We are building a community of shoppers and retail partners who are pushing back on an antiquated and wasteful way of processing returns.”

Greenlist is still in the process of building a critical mass of customers through integrations with retail e-commerce sites. But once enough people are on the wait list, Greenlist plans to roll out the network and allow customers to opt in with the click of a button.

Watch: What goes around comes around

All of the companies mentioned so far have taken steps to make returns more convenient for either the customer or the retailer — or both. But what if they could eliminate returns entirely? That’s the approach being taken by Newmine, a firm dedicated to helping retailers understand the reasons behind returns.

“Our platform, Chief Returns Officer, analyzes data from multiple retail platforms. … This analysis reveals the root cause of why the returns are happening in the first place,” Navjit Bhasin, Newmine’s CEO, told Modern Shipper. “And since 73% of returns occur for reasons within the retailer’s control — like sending the incorrect product or misrepresentation of the product on the website — the platform also prescribes corrective actions so you can prevent returns.”

Newmine’s solution attempts to find the root cause of returns, whether that’s damaged or lost products, delayed deliveries or customer dissatisfaction. It does this by poring over product, transactional and customer feedback, aggregating those insights into a single score.

Eliminating returns entirely makes sense as the ultimate goal for retailers. But until that day arrives — and it may never — they need reverse logistics companies to continue innovating with new models and technologies to make the process as simple as possible.

Luckily, The Lead proved that when it comes to returns, innovation is alive and well.

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Jack Daleo

Jack is a staff writer for FreightWaves and Modern Shipper covering topics like last mile delivery and e-commerce fulfillment. He studied at Northwestern University, majoring in journalism with a certificate in integrated marketing communications. Previously, Jack has written for Backpacker Magazine and enjoys travel, the outdoors, and all things basketball.