Introduction

What’s the Story? The Coresight Research team will attend and participate in this year’s Shoptalk conference, which will be held on March 27–30, 2022, in Las Vegas, US. Shoptalk 2022 will address the sudden transformation in the retail environment since the outbreak of Covid-19, as the industry is looking to embrace technology and innovation to address new challenges. On March 27, 2022, Deborah Weinswig, CEO and Founder of Coresight Research, will emcee and feature on the judging panel of Shoptalk 2022’s “Shark Reef” startup pitch competition, which will see 15 early-stage US retail-technology innovators compete to win the Shark’s Choice and Audience Choice awards. In the lead-up to the event, we are profiling the participating innovators. This report forms part of our Innovator Profile series, which focuses on emerging technologies that are disrupting traditional retail and fuelling innovation across the retail value chain. We present Returnmates, a shipping and returns retail-tech company. Coresight Research collaborated with Returnmates to offer insights into its service capabilities and offerings. Why It Matters Coresight Research categorizes the 15 participating innovators into four areas of disruption in retail. Returnmates falls under “consumer experience and client relationship management.” As consumers interact with brands and retailers across more channels—both online and offline—in a post-pandemic world, they will gravitate toward those that provide a richer, more engaging shopping journey. Retail-technology companies are helping retailers by creating seamless channels of communication, integrating digital infrastructures, and simplifying online shopping, with the aim of better managing their relationships with their clients and enhancing the overall consumer experience.

Returnmates: In Detail

    Headquarters Venice, California, US Funding Stage Seed stage Total funding amount: $5.0 million Company Description Founded in 2020, Returnmates is a retail-technology company focused on simplifying the shipping and return process for consumers and retailers. The company’s service allows users to return e-commerce purchases and rental products easily, and also facilitates resale and peer-to-peer shipping. The solution involves drivers collecting items from consumers’ doorsteps and transporting them to Returnmates’ warehouses, where the items are packaged and shipped on. Consumers can schedule a collection time that suits them and select from different methods, including direct handoff or doorstep placement. Users also benefit from real-time updates on package tracking once it has shipped. Returnmates offers consumers instant refunds and insures each item for up to $1,000. Returnmates aims to make the shipping and return process as seamless as online shopping, according to the company. Its aim is to fully digitalize online returns by enabling returns accessibility through a few clicks on a consumer’s phone. [caption id="attachment_143786" align="aligncenter" width="700"] Source: Company website [/caption]   What Problem Is the Company Solving? While online shopping has become easier and more convenient through more advanced and digitally integrated online retail platforms, the returns process can still be complicated and inconvenient. Traditional returns processes require consumers to source packaging materials and often require access to a printer—as well as time and effort to visit a post office. These challenges often put off consumers from completing online purchases they aren’t entirely confident with, presenting a barrier to sales conversion. Returnmates’ solution cuts out the hassle for shoppers and bolsters the attractiveness of e-commerce transactions, according to the company. Market Opportunity  We estimate that US online retail sales totaled $806 billion in 2021 and will reach almost $1.2 trillion in 2025, representing a CAGR of around 10%. As e-commerce sales grow, online retailers will have to confront the issue of high returns rates. According to the National Retail Federation, total retail returns amounted to $761 billion in the US in 2021, comprising 16.6% of total US retail sales. By comparison, returns rates are higher in e-commerce, at 20.8% in 2021. As returns continue to plague retailers’ bottom lines through returned revenue, inventory markdowns and return shipping costs, it is in retailers’ best interests to streamline the process in order to reduce costs. Coresight Research survey findings from March 2021 reveal that 42.4% of US consumers had returned unwanted products in the prior 12 months. In our survey, 38.8% of the respondents that returned products reported that they prefer to return online purchases in physical stores—perhaps due to lower costs and increased convenience. Retailers should look to enhance their reverse logistics capabilities to better cater to consumer needs and preferences. The global reverse logistics market reached an estimated $669.1 billion in 2021 and is set to reach $958.3 billion by 2028, according to Statista, representing a CAGR of about 5.3% during that period.

What We Think

As e-commerce continues to grow in popularity, consumers are demanding cheaper and more convenient ways of returning unwanted items. Retailers should look to innovative retail technologies to assist them in optimizing returns processes. We believe that retailers with simple and sustainable returns systems will gain a competitive edge in the online retail market.