How The CEO Of ReturnRunners Is Working To Disrupt The $350 Billion Retail Returns Industry
Mondays can be rough—sometimes we need a little motivation to get the week started. Our #MondayMotivation blog series brings you tips and life hacks from Project Entrepreneur Alumnae—female founders who applied to the Project Entrepreneur Venture Competition to attend our two-day PE Intensive and join a nationwide community of hundreds of women entrepreneurs. Get to know more about the PE Community and #beinspired by how these women motivate themselves each Monday to tackle the week ahead.
Have you ever purchased the perfect pair of shoes online, only to discover upon receiving them and trying them on that the fit is…less than perfect? Or that the color actually isn’t an exact match to that skirt you’ve been trying to wear for months?
Returning purchases can be difficult and time-consuming, but Fara Alexander, CEO and Co-Founder of ReturnRunners, is looking to change all that (and disrupt the $350 billion reverse supply chain). ReturnRunners is a personal service that helps people return unwanted items to retailers. Fara attended the PE Intensive in 2017, and we had a chance to chat with her recently about how she’s been building ReturnRunners since attending the Intensive, why it’s difficult to please both consumers and businesses with the same product, and how she manages to avoid distractions and stay focused on the core activities that keep her business going forward.
What inspired you to start your business?
Making retail returns, especially when living in a big city like Chicago or New York, has always been a hassle. Taxis/Ubers are expensive, lines are long, and stores are not conveniently located. I looked around and saw that there are so many service-focused companies emerging (and crushing it!!) that are solely focused on delivering items to consumers (think Instacart, Grubhub), but no one was looking at the reverse supply chain as an area ripe for disruption. After doing a bit of research, I learned this space, and in particular the returns industry, is giant. Like, $350 billion annually, giant.
The painful consumer experience, coupled with the significant loss retailers have been taking, especially as online shopping continues to compound the number of items being returned, inspired me to try to make things better for the consumer and the retailer! Thus, we created ReturnRunners, the world’s first on-demand, white-glove return service, offering a hassle-free way of making returns and a streamlined supply chain solution for retailers.
What’s been the biggest challenge you’ve faced so far?
The “chicken or the egg?” dilemma has been the continuous theme of our journey. We have a two-sided marketplace. On one side, we’re selling to consumers, who are eager to use our service because our product is unique and solves a major pain-point for them. However, it’s expensive to acquire customers and also make the unit economics of our business work.
On the other side, working with retailers presents an enormous business opportunity. However, each store’s chain of command operates differently, it’s challenging to identify who the key decision makers are, and the sales cycle can be much longer. But once we can capture their attention, and have a minute to demonstrate the value-proposition that ReturnRunners offers, they are not only willing to listen, but enthusiastic to learn more about how our platform can help them enhance their service/loyalty platforms and streamline their reverse supply chain.
This has been a delicate balance to figure out, but now that we have some demonstrated market traction and established relationships on the B2B side, it’s becoming an easier shell to crack!
What’s been the greatest reward?
My favorite thing is when orders come in, and we have absolutely no idea how these people found us. They are not connected to any names in our CRM system, and we can’t track them to any lead forms, marketing campaigns, social media posts, etc. Word-of-mouth can be such a powerful (and sometimes ignored) tool, and while we know we have to invest in paid marketing to keep growing, acquiring new customers, and keep at pace with our lofty goals, those completely cold orders always make me smile.
What changes would you most like to see in your industry, and how are you working to make those changes happen?
Returns have always been the ugly duckling in the retail world, and I think that’s because many retailers are struggling in this new age of e-commerce. They don’t have the resources or infrastructure to be able to resell these goods in a way that is profitable. Therefore, many stores are forced to significantly mark-down returned items, or sell them for pennies on the dollar to liquidators or off-price/off-aisle stores.
We are working hard to change that by creating a solution for dealing with returns that not only saves retailers money, but also offers them an outsourced solution to recover the maximum amount of value for those unwanted items. We just received a strategic investment from goTRG, a leading reverse supply chain company, whose clients include large retailers like Walmart, Target, Home Depot, and Amazon. ReturnRunners sources unwanted items directly from the consumer through our white-glove service (eliminating unnecessary, costly touch-points), and then we can leverage our relationship with goTRG to apply their intelligent dispositioning technology to determine the best path for those items and send them directly to their next point of sale.
Many people are focused on charging retailers for their services. We are creating a model where we make money, but also where we also create financial upside for our retail partners. We want them to stick around, we want to change the tides of the headlines, and we want to serve as their true ally, helping them deliver an amazing consumer post-purchase experience and recover significant value for returned merchandise. The bigger we can help retailers grow their pie, the larger the slices will be for us.
Also, like many tech industries, ours is severely underrepresented by women. I think that’s because the common images that are conjured up when many people think of supply chain and logistics are of shipping freights and trucking fleets. We are trying to create an aspirational, white-glove brand to attract fresh, diverse talent to this space and change the face of this industry.
Who or what motivates you to keep going, even when things get tough?
We are lucky in that many of our clients have been eager to share their positive feedback with us. Their loyalty and belief in our product is why we do what we do! Whenever I’m having a bad day, I will scroll through the countless testimonials in our database and remember how our service made someone’s life easier or leveraged their time. Always having that “why” to come back to keeps me inspired and gives me the motivation to keep pushing forward, even on a bad/stressful day.
Can you provide a few updates on what’s new with your business or what you’ve accomplished since you attended the PE Intensive in April 2017?
So much has happened since participating in the PE intensive in 2017! In the past year, we’ve released our App, built a revenue-generating supply chain and logistics business, and have successfully on-boarded hundreds of clients and returned thousands of items to 50+ local and online stores. We are now expanding into building out retail partnerships, and are working hard to have a few pilots launch this holiday season (we are actively looking for retailers who want to work with us!!).
We also managed to demonstrate enough proof of concept to attract the investment interest of one of the largest supply chain and logistics companies in the country, goTRG. We were honored to be chosen for the 12-week WiSTEM Accelerator, which concluded last month, and has already opened so many doors for us. We remain excited about the future of our budding business!
Can you describe a problem you solved in your business that other early-stage founders face and tell us how you went about solving this problem? How can other early-stage founders repeat your success?
The list of to-do’s and responsibilities as an early-stage entrepreneur is never-ending. It’s so easy to get distracted by an overloaded inbox or by small things that you seemingly need to get done, but that don’t necessarily drive your business forward. I am constantly reminding myself of these things, as it’s in my nature to want to be responsive when someone sends me an email. At the end of the day, it’s my responsibility to make sure that the things I’m doing are contributing to the growth of my business. I have organized my daily activities into four buckets: customers, retail partners, technology or operational needs. If I’m spending time on things outside of those core activities, I’m not doing what’s best for my company, employees, or investors. I’m not perfect, but putting this structure around my daily activities has helped me stay focused.
What’s one piece of advice you’d give to other entrepreneurs just starting out?
Be patient. Entrepreneurs tend to be type-A and have high expectations that things should happen immediately. It’s easy to get discouraged when they don’t. Invest in implementing processes and measuring weekly progress (KPI’s) early on. It might not seem like much is changing week over week, but over time things will start to add up. And remember, you’re creating something that didn’t exist in the world. That’s something to be proud of!
For more motivation from our PE Alumnae, check out our interview with Jessie Garcia, Founder and CEO of Tozuda. At Tozuda, Jessie and her team are creating small head impact sensors that make it easier for people to know when they may have a concussion, even if they aren’t experiencing common or expected concussion symptoms. We chatted with Jessie about how she’s been building Tozuda since attending the PE Intensive in April 2017, her biggest challenge building a hardware startup, and how she overcame spending an entire year rebuilding her product from scratch.