The last mile can often be the most taxing — and in logistics, customers’ expectations continue to intensify when it comes to shipping and delivery. The same applies on the reverse end of the logistics chain, as online shoppers seek easier ways to return items, repair products they’ve already purchased and receive refunds.
Aiding in that space is ReverseLogix, a reverse logistics startup offering a B2B solution for eCommerce brands, third-party logistics solution providers and manufacturers. The firm connects these businesses with Software-as-a-Service to automate and manage end-to-end reverse logistics, including workflows surrounding returns, repairs and after-sales product care.
In an announcement this week, ReverseLogix revealed a $20 million investment round, marking the first time it has secured external funding. Investors at Cambridge Capital led the Series A backing, while Cambridge Capital’s Benjamin Gordon and Matt Smalley will join the startup’s board of directors.
In a statement, ReverseLogix Founder and CEO Gaurav Saran said he has bootstrapped the business for the last six years, and bringing Cambridge Capital on board will “allow us to continue developing our platform, expanding our leadership team and extending our high-growth trajectory into 2021 and beyond, leveraging their industry relationships with key customers and partners.”
ReverseLogix pointed to Bank of America and McKinsey data that revealed one-quarter of all consumer purchases made online in the U.S. are eventually returned. Last year alone, eCommerce volumes saw a 70 percent increase in returned packages. The friction associated with processing returns, facilitating refunds, checking and restocking the returned product, and other workflows means that eCommerce companies can lose up to 20 percent of the underlying value of an item purchased.
As a result of the pandemic and subsequent surge in online shopping behavior, ReverseLogix noted, those losses can be even higher: Researchers revealed that eCommerce now accounts for about one-third of all retail sales.
PYMNTS’ own data, published in last month’s Online Ordering’s Return Round Trip report, discovered that many top retailers like Walmart, Amazon and Target often prefer that customers simply keep the item they wish to return, because the cost of processing the return outweighs the cost of retrieving it.
To aid with this pain point, ReverseLogix is looking to help companies retain greater value of their sold and returned goods, addressing friction in the return logistics process with a centralized platform that deploys artificial intelligence (AI) and machine learning at key areas of the process.
Last December, Optoro Co-founder and President Adam Vitarello spoke with PYMNTS about how hard retailers were hit at the end of 2020 by returns-related costs and friction. According to Vitarello, organizations not only have an opportunity to strengthen their own back-office and logistics operations, but can take a return event as an opportunity to strengthen the customer relationship.
“Rather than trying to shy away from it or put people through hoops, smart retailers are recognizing an opportunity when the customer gets in touch with them,” he said. “They want to take the opportunity to prove their brand value and provide a great return experience. And so you’re now seeing a lot of forward-thinking brands make returns easy for customers, which is critical because it drives loyalty.”