INSUBCONTINENT EXCLUSIVE:
Loop Returns, the startup that helps brands handle returns from online purchases, has today announced the close of a $10 million Series A
funding round led by FirstMark Capital
Lerer Hippeau and Ridge Ventures also participated in the round.Loop started when Jonathan Poma, a co-founder and COO and president, was
working at an agency and consulting with a big Shopify brand on how to improve their system for returns and exchanges
After partnering with longtime friend Corbett Morgan, Loop Returns was born.Loop sits on top of Shopify to handle all of a brand’s
It first asks the customer if they’d like a different size in the item they bought, quickly managing an exchange
It then asks if the customer would prefer to exchange for a new item altogether, depositing the credit in that person’s account in real
time so they can shop for something new immediately.If an exchange isn’t in the cards, Loop will ask the customer if they’d prefer
credit with this brand over a straight-up refund.The goal, according to Poma and Morgan, is to turn the point of return into a moment where
brands can create a life-loyal customer when handled quickly and properly.The more we shop online, the more brands extend themselves
financially, and returns are a big part of that
Returns account for 20 to 30% of e-commerce sales, which can become a terrible financial burden on a growing direct-to-consumer brand
And what’s more, the cost of acquiring those users in the first place also goes down the drain.Loop Returns hopes to keep that customer in
the fold by giving them post-purchase options that are more sticky and more lucrative for the brand than a refund.The company thinks of it
as Connection Infrastructure
Most brands already have a customer acquisition architecture, and Shopify and Amazon are ahead when it comes to the infrastructure around
But the ties that bind customers to brands haven’t been optimized for the many D2C brands out there looking to make an impact.“The big
problem we’re trying to solve long term is connection infrastructure,” said Morgan
“Why does this brand matter? Why does it mean something to me? Why does the product matter? We want to enforce more mindfulness and
meaning into buying.”Of course, a more mindful shopper doesn’t yield as many returns
Poma and Morgan admit that the goal of their software is to minimize returns, the very reason for the software’s existence
After all, return volume is one of a handful of variables that help Loop Returns determine what it will charge its brand clients.But the
team is thinking about other layers of the connection infrastructure, with plans to launch a product in 2020 that also focuses on the
connection point after purchase
Poma and Morgan believe, with an almost religious reverence, that the brands themselves will help lead shoppers and infrastructure providers
to a better, more connected shopping experience.“Brands are the torch bearers,” said Poma
“They will lead us to a more enlightened era of how we think about buying
Empowerment of the brand will lead us to a better consumerism.”The co-founders stayed mum on any specific plans for the 2020 product, but
did say they will use the funding to expand operations and further build out its current and future products.Of course, Loop is playing in a
Not only are there other players thinking about post-purchase connection, but Shopify has itself built out tools to help with exchanges and
returns, and even acquired Return Magic, a similar service, in the summer of 2018.That said, Loop Returns believes there is a long way to go
as it builds the “connection infrastructure,” and that one clear path forward is actual personalization
With data from returns and exchanges, Loop Returns is relatively well-positioned to take on personalization in a meaningful way.For now,
Loop Returns has more than 200 customers and has handled more than 2 million returns, working with brands like Brooklinen, AllBirds,
