Return Pickup: The Future or a Fad?
In life, not much is guaranteed. However, in e-commerce, if large players such as Amazon and Walmart are starting to offer a service… you can rest assured that, pretty soon, your customers will start to expect it as well.
In recent months, Amazon and Walmart have both begun offering return pickup for a fee!
Amazon offers UPS pickup with no label required through UPS for $11.99. The UPS driver has a label ready to go, and when they pick up the return, they seal the box and slap the label on. Super convenient!
Walmart has two discreet return pickup offerings. They offer pickup through FedEx for free in some markets. The customer must box, label and schedule the return pickup through FedEx, but then is afforded the convenience of pickup.
Walmart has also rolled out a new service called “InHome” which includes return pickups.
InHome provides in-your-fridge grocery delivery, pharmacy drop-off and box-less, label-less return pickup for $19.95 a month. This service leverages Walmart’s sprawling store network, and sends retail associates to pick up returns.
Amazon and Walmart expanding their at-home offerings tracks with broader convenience trends in the market. Even as lockdowns loosen across the country, DoorDash broke records in Q4 2021 for total orders, gross order value and posted 25mm active users. Uber also reported that they were the fastest-growing delivery player in America.
As Amazon and Walmart are the 800lb (363kg) gorillas of e-commerce innovation, we can safely assume return pickup is here to stay.
Ahead of its Time
In an era where food is delivered on-demand, cars are delivered to your door and even barns are available for shipment in 6–10 days, why are we just seeing return pickup offered? Surprisingly it was first available almost a decade ago through a startup called Shyp. Through the Shyp app, users could schedule a Shypper to pick up, pack and send their return through a carrier, all for $5.
So… why are we not ‘Shypping’ our returns back now?
Shyp was cursed with being ahead of its time. US e-commerce sales were a little less than a third in 2013 of what they are today (2021). Same and next-day delivery wouldn’t be available through Amazon until 2020. Ridesharing had just begun to take off in select cities.
Americans were onboard with 2-day shipping and Prime had matured past infancy, but major parts of the economy had yet to be shared, gig-ified and digitized.
Shyp also had a couple of strategic missteps.
First, Shyp’s business model was on-demand, despite little consumer need for same-day pickup of returns (procrastinators excluded). Without boring you with the details, on-demand is a great customer experience but very expensive to execute.
The second misstep was focusing the app on consumers rather than integrating with businesses. Consumers tend to visit the site of purchase to make a return and it would take a monumental marketing effort to change that line of thinking (this is why it’s important to have a great return platform). CEO Kevin Gibbon admitted being advised against chasing consumers but heeded their message too late. It wasn’t until 2015, one year before bankruptcy, that they partnered with eBay to service pickups for sellers, but by then it was too late and Shyp had to scale down operations and eventually shut down.
The New Players
Shyp’s sinking was enough to scare would-be entrepreneurs against returns pickup for three years. In 2019, new returns pickup players started to enter the market.
The first is Returnmates. Started by a former Uber employee, Returnmates has a similar business model to Shyp albeit at a higher price point ($6 per pickup and $2 per additional package) and a focus on B2B partnerships in addition to their B2C scheduling site.
They have started working with Rent the Runway to offer return pickup in LA and Miami, which has led to an over $5 million seed raise.
Rent The Runway is also working with another pickup startup in NYC: Quikreturn. Quikreturn raised $390k through Plug N Play ventures.
Outside of the Rent the Runway pickup ecosystem, ReturnQueen created a B2C app that can scrape your email for e-commerce purchases at supported retailers. This allows you to organize your purchases into one place, but also setup returns for each order.
All of these new entrants are operating out of limited markets as they need to acquire assets and employees to scale, but the momentum to provide return pickup is growing.
The Future of Returns
At Boomerang, we want to give your online store the same returns experience as the bigger players. That is why we implemented optimized return pickup right into our returns management platform.
In addition to matching the experience of Amazon and Walmart, we also know that consumers prefer pickup 3–4x more than dropping a return off. With our platform, we also give you the power to set your own pickup price. Meaning, if you want, you can totally cover the cost of pickup and offer a high-end customer experience similar to that of Apple or Mr. Porter.
Or, you can pass this cost on to your customer, and maybe even set a fee over the price of pickup and recoup some additional revenue on the return. Your company, your returns journey!
Aside from upfront revenue, we can also get your item back into inventory over 22 days sooner, which is 22 additional days where it could sell at a higher price (before discounting). Our platform is just one piece of the return logistics puzzle, reach out to the Boomerang team here to see how we can build your perfect returns strategy.
