Enterprise Mobility & the Connected Worker Blog



Zebra Technologies Leads $25M Strategic Investment in Optoro, as Holiday Shopping Season Highlights Importance of Returns

by James Asselmeyer | 1/24/2022

On December 22, Optoro, Inc. announced a $25 million strategic investment led by Zebra Technologies. Also participating in the funding round were Volta Circle, eBay, and UPS. This investment comes as returns processes become a top-of-mind issue for retailers, brands, and 3PLs. Shifting consumer behaviors like the migration toward e-Commerce and the rise of bracketing have pushed returns volumes to new heights.

According to data shared yesterday by the National Retail Federation, a whopping $761 billion worth of retail purchases were returned in the United States in 2021. This equates to 16.6% of total US retail sales – looking specifically at e-Commerce, that rate climbs to nearly 21%. Most notably, returns as a percentage of retail sales increased 6 percentage points between 2020 and 2021, from 10.6%. Given increased returns rates, returns services providers like Optoro are receiving increased attention as brands and retailers recognize the critical importance of minimizing cost and maximizing revenue from returned goods, as well as the opportunity to compete for shopper loyalty in the returns experience.

As the e-commerce shopping experience is scrutinized, brands recognize that a seamless returns experience can be instrumental in encouraging first time shoppers to follow through on their order and driving repeat purchases. The challenge this raises is that inefficient, often wasteful and unsustainable returns processes inflate the cost of returns and call into question the ROI of a great returns program. In order to offer great returns terms without annihilating margins, sellers will need to automate decision-making and optimize processes to eliminate costly shipping where possible and focus on enabling returned goods to re-enter sales channels as quickly as possible.

Optoro’s end-to-end platform, which is utilized by retailers Target, Staples, Best Buy, IKEA, and American Eagle addresses all aspects of returns processes in order to create a strategic advantage for its customers. Turning returns into a competitive edge requires an easy, comprehensive returns program including the ability to drop an item designated for return to a drop-off center or summon a carrier home-pickup. Optoro provides these options with a drop-off network including 1,000 Staples locations in the United States.

The customer-facing portion of the returns process is critical to competing in e-Commerce today, and the operations performed in the background are paramount to enabling the entire process while achieving a return on investment. Optoro drives efficiencies in these operations by first and foremost eliminating excess shipments. Rather than accumulating all returned goods at a central hub to be sorted, sorting takes place wherever goods enter the reverse supply chain.

At this point, new/like-new items are designated for return to primary sales channels and those marked as imperfect for any reason are directed to secondary sales channels – or landfills in rare cases. In light of today’s constrained supply chains, converting returned goods into useable stock efficiently is paramount, and Optoro claims their operations can do this in less than seven days. Optoro also operates a B2B marketplace called BULQ which connects customers to additional secondary sales channels, ensuring brand’s recoup the maximum value from returned goods. These operational efficiencies ensure that more returned goods avoid landfills and are sold to consumers, not only driving increased revenues, but also enabling brand’s to pursue sustainability initiatives with confidence.

Zebra Technologies and Optoro, Inc. are both featured in VDC Research’s upcoming report, Addressing Last Mile Delivery Service Challenges with Modern Mobile Solutions. For more information or interest in custom research services, please e-mail info@vdcresearch.com.