As the volume of e-commerce sales continues to grow (increasing 16% last year), so does the problem of e-commerce’s unruly alter-ego: returns.
To address the costly problem, ‘returns optimization’ startup Optoro raised $75m to expand its platform that helps e-tailers find new homes for returned e-commerce products
Riding growing e-commerce to success
Since 2010 — the year Optoro was founded — e-commerce has grown from justs 4.2% of overall retail sales to about 10% today. According to the Commerce Department, US e-commerce totaled $453.5B last year.
But as online purchases increase, so do online returns, posing a problem for retailers that can’t process a high volume of returned merch.
We’re talking half a billion
Last year, 10% of retail sales were returned, and e-commerce sales are returned at an even higher rate (up to 40%). Optoro estimates the annual market for US returns is $380B.
Since many e-commerce retailers don’t sell returns at full value, this growing volume of returns translates to huge losses. That’s where Optoro comes in: The platform uses data analytics and multi-channel analytics to find returns new homes, ensuring that losses stay as low as possible.
Now Optoro, which has raised $244.4m to date, will use this cash to expand its platform in time for the biggest blitz of the year: holiday returns.