A Swedish startup has stepped up as a pivotal piece in the e-commerce puzzle following a merger with one of Europe’s largest supply chain operators.
In its former guise, Returnado’s cloud-based solution to retailers sought to make the returns process more seamless for consumers and more lucrative for enterprises. The idea was to convert a traditionally frustrating process of returning items into a seamless activity for shoppers, who would then be provided with replacement options as a way to generate additional or alternative sales for the retailer.
Now, the pioneer formerly known as Returnado operates under the nShift banner, as nShift Return, after the delivery management specialist identified returns as a missing piece in the e-commerce – and indeed its own – jigsaw.
Returnado founder Haider Abdo recently left the nShift brand, but oversaw the evolution of his initial brainchild, and its successful integration into the nShift setup.
He says: “Returnado, as nShift Return, still carries the same proposition, essentially – it’s the same technology and the same market differentiator. The difference is scale, and its legitimacy to the retail market.”
In this regard, the acquisition, and resultant positioning alongside four other specialised e-commerce arms, represents a perfect storm. Returnardo had established itself in the European market as the go-to provider of returns solutions, but large-scale prospective customers still associated risk with the idea of partnering with a scaleup.
Now, customers are getting what they crave in the form of seamless returns processes, retailers can boast returns as a genuine differentiator, and nShift has added a final string to its e-commerce bow.
Abdo adds: “It was never the idea to change the Returnado model, but it now has the organisational structure and scale to make a more widespread difference, to sign more deals, to leverage greater resources, and to provide more value to the industry.”
A move up the priority list
The acquisition, and subsequent unveiling, of nShift Return was completed by September 2021, and in the six months that followed, the entity has begun to realise this ambition of footprint expansion.
Success was never in question even without the merger, with Abdo already initiating a larger funding round before discussions with nShift began. However, once the wheels were in motion, the opportunity to better serve a broader swathe of consumers was too good to pass up.
“Over the past year alone, there has been such a clear demand increase among customers who now place returns much higher up their priority list,” he says. “If you look at the pandemic period as a whole, the change in mindset has been massive, but in the past year especially, that realisation has become more of a differentiator around whether they continue to use a retailer or not.”
The reason why retailers have responded accordingly is because of this consumer pressure, says Abdo. “If you look at the Covid-19 period, businesses had so many supply concerns – they couldn’t guarantee delivery of products, there were warehousing issues, labour shortages, packaging shortfalls, availability challenges.
“With all of this in mind, they simply couldn’t handle returns quickly enough. But, initially, that was OK because returns hadn’t been the main source of contention for shoppers.”
Now that situation has flipped almost entirely.
Exposing bad returns
Two years on, and people are not only monitoring returns processes and successes, but they are ready to take action against unsatisfactory experiences.
Abdo says this probably would have happened over time anyway, through a natural evolution of online shopping. However, he admits the pandemic has expedited the trend.
Shoppers who were traditionally inclined to shop in-store were suddenly forced to buy products online, he says. At first, they would have presumed that any slow or poor returns processes were the norm. However, as they have become more digitally savvy or e-commerce-focused, expectations have risen. An initial annoyance is now a reason not to shop with that provider any more.
Abdo adds that Returnado played a part in reconfiguring this customer demand. “Before, technically, nobody was bad at returns, because everyone was bad. That was the default level of service, so nobody really complained or even clocked on to it being a problem,” he says. “However, with Returnado, some retailers began offering their customers a better way. And now, as nShift Return, the company is bringing that realisation to even more people.
“In that situation, when customers are being given this better experience elsewhere, they are less likely to tolerate a bad experience with someone else. Those retailers that still rely on ignorance around returns will quickly be found out and left behind.”
Another shift from Sweden
As a serial investor and entrepreneur, Abdo is renowned in the Nordic market for sensing opportunities where others haven’t. But he is quick to point out that, although nShift Return is a pioneer in the e-commerce space, he wasn’t the first to break the retail mould from Swedish shores.
“The idea of the retail sector not realising that a process could be improved until it was, can be taken back to Klarna,” he says. “The bar for online shopping, especially in the Nordics, was pretty low before they came along.
“It was difficult to carry out purchases, to get credit or to complete transactions in a satisfactory way. But because that was the norm across the board, nobody questioned how much it was annoying shoppers, or hurting businesses.
“Then Klarna arrived and gave consumers a reason to demand better, and businesses a way to improve their profits through a better proposition. At that point, if your company didn’t respond, adopt and innovate, it was left behind. It was as simple as that.”
This ambition to do better, and to improve a sector so directly, is what has driven Abdo in all his entrepreneurial ventures to date. His scope continues to expand far beyond the confines of retail, either as a founder or investor. But this shift for his Returnado brainchild stands high among his achievements.
“This was the fourth company I have founded, but the most successful one so far,” he says. “It was an exciting, challenging and humbling journey, from reading theses and trying to identify gaps in such a significant industry from my own basement, to being part of a global leader in e-commerce logistics services.
“It was an incredible five-year journey for me, and long may it continue for nShift Return.”