Retailer’s answer to returns hassle
Christchurch retailer Gerry Shackleton of Urban Style has a new venture which she hopes will take the hassle out of returning goods after a purchase. Shackleton, who has been in business for more than 20 years, tells Aimee Shaw how she set up Returnit to scale up and offer an alternative revenue stream and sustainable way for couriers to operate.
What has your venture set out to achieve?
Returnit was an idea I had quite a few years ago, born out of frustration. I saw an opportunity, knowing, particularly in fashion, what the returns rates were.
Of every 100 parcels that go out you are going to get 10 to 20 back on average, and so I thought ‘Why don’t you just get the parcel picked up from the door’.
If you’re a home-based business you can set up an account with the courier company, but I wondered why it had to be only if you had a business, and so we researched what was possible and have set up a fully tracked residential courier service that picks up from your door.
We have a handful of retailers using our service, including Shine On, Flo & Frankie, Andrea Biani, and Mode.co.nz.
The benefits for the retailer is that it completes the full circle experience for their customer.
A lot of the time there is a lot of hand holding and getting a customer to shop with them, then as soon as they want to make a return, they drop like a hot potato.
Many companies are making returns quite difficult, such as people needing to email to request returns and putting a lot of steps in place to discourage a return, but our view is if you keep that cycle going you have a happy customer as they find it simple and end up shopping with you more.
People are more likely to try more items if it is simple to drop back.
Free and easy returns, particularly for online shopping, are prevalent overseas in markets like the UK, but New Zealand is behind the curve on trying to make the return process seamless.
Most people don’t want to promote it and some no longer offer refunds.
How much have time and money have you invested in it until now?
I’m running this on the side to Urban Style.
We launched the business over a year ago, but I originally had the idea and started working on the concept and the model six years ago.
Investment-wise, we’ve put in about $60,000.
How do you make money from Returnit?
There’s no cost to the retailer, they direct their shoppers to our website. The shopper pays and we take our cut. We’ve got rates with NZ Post, and we just put a margin on that. At this time we’re across the four bag sizes and are 95 cents more than going to the Post Shop. It’s good value. The Post Shops are getting fewer and further between. The business is also like creating a whole new revenue stream for their courier vans so they don’t go back to the depot empty after doing their deliveries. Because the business is low margin, we need high volumes.
In three years’ time you will be ...
I can see unlimited growth potential. We’re just getting our Australia and rest of the world rates put into place. I would like to see Returnit set up in Australia as an independent and partnering with Australia Post.
I see Australasia in our immediate path and growing as a residential brand, that can also be used for the sending the likes of Christmas or birthday presents too.
What does expansion look like for Returnit?
Returnit is easily scalable as it is hugely convenient.
Every household could be using it and there is no reason why Returnit can’t grow to become what UPS is in the US.
Is this your first stint owning and running your own business?
I’ve always had a business mindset and had always wanted to be in business; I did a small business course at Polytech, and prior to that my first job was in the accounts department at Christchurch Teachers College and that gave me a good understanding of accounting, reconciling and a good head for numbers.
I have been in business since 2002, when I started Urban Style, back when I was pregnant. I went to the bank and I wrote a one-page business plan on paper and said can you give us some money and we opened in December that year.
Then we set up online retailer Retail On Sale to get rid of sale stock, which is what Mode.co.nz has become, and it worked quite well and morphed into a fashion website; bringing boutique shops online when online shopping first kicked off.
Most helpful piece of advice you have ever received?
If it is something you really want; persist. That is something that I have only learnt in the last year, prior to that I just thought if something didn’t work out it wasn’t meant to be. Chip away and take action to achieve what you want everyday, and it will happen.