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OtailO
Over 30% of all online purchases are returned. In the fashion industry, this number can exceed 50%.
50% of these returns are trashed or sold for next-to-nothing in secondary markets. Online product returns cost the retail industry over $500B. This number is set to reach $700B within 3 years. Over-and-above the terrible wastage of millions of new, unused items that are trashed, consider the carbon footprint: fuel emissions, packaging, transportation, time, resources and handling costs of billions of global returns.
The root cause of the online product returns challenge is the reverse logistics: the process by which the returns are sent back. This process is expensive (consider logistics, transportation and handling costs), timely and unsustainable. To break even from financial losses, the retailer needs to sell 3 times the returned item, (for an item of an average cost of $50). No wonder that it is simply cheaper to trash the returns than to return them to the store!
OtailO provides a solution that strengthens both online and offline retailers. Their technology transforms authorised resellers of retail brands into the return and resale spots. So, when a consumer decides to return a purchase, they bring it into a local authorised affiliate, who inspects, validates and resells the return to a new shopper.
The OtailO solution is win-win-win:
Online retailers reduce their logistics costs, reduce wastage of online product returns and carbon footprint. They also get a human agent and ambassador handling and validating the return – potentially 1000s of kilometers away from the physical returns warehouse! In fact, their returns are now digitalized in a virtual dashboard and distributed in hundreds of thousands of micro-logistical centers in offline stores all over the world. This dashboard provides data insights about returns, consumers and retailers on the platform. It opens up a whole new world of analytics, reports and smart business decision making.
Consumers get a green return journey without packaging or label printing, a seamless and friendly customer experience, and a quicker refund.
Offline retailers get a steady stream of quality foot traffic, commissions of sales of returns and opportunities for upsell.
OtailO's Story
With so many of us buying online and e-commerce growing rapidly, the challenge of online product returns affects each one of us. When OtaliO founders personally discovered how many returns were trashed or sold in secondary markets, and when they realised that millions of packages travel all over the world only to never be resold, they realised that darker than the massive losses of revenues- was the negative impact of the returns themselves: the massive carbon footprint, the tremendous wastage, the mountains of packaging and printing. This horrifying reality is getting worse and worse, with little governance and accountability.
As children of former corner-store owners, they could also not stay oblivious to the complicated plight of offline retailers: the loss of traffic, the steady encroachment of e-commerce, the massive global closures of brick-and-mortar stores- especially in light of the current pandemic. And yet, these are the businesses that fundamentally understand retail, consumers and are professionally equipped to deal with returns.
Their resolve was to find an alternative to the reverse logistics paradigm, inspired by the circular economy. A returns management method that was better, lighter and more sustainable. A solution that would benefit online and offline retailers, consumers and the planet.
As consumers and entrepreneurs, they feel the need to share the story of the online product returns, so that each person can make educated decisions about their own personal carbon footprint. And, given the inevitability of returns, this means also enabling a true green route for returns management.
And thus OtailO was born.