RetailTech Companies That Will Help You Navigate The New Normal: ZigZag Global
ZigZag: Solving That Return Problem
JANUARY 10, 2018 by Marie Driscoll
Overall retail return rates average about 10 percent, according to recent NRF data, but ecommerce return rates run three to six times as high for some fashion ecommerce brands. According to ZigZag, 30 percent of shoppers intentionally (frequently urged by retailers) over-purchase and 20 percent order multiple versions. The result? Fashion retail is especially vulnerable to high return rates given sizing inconsistencies and purchasing patterns.
Estimates for the global cost of product returns range from $220 billion to $260 billion. Free shipping, the high cost and inefficiency of reverse flows and the low residual value of the returned merchandise heighten the adverse impact returns have on retail. Half of U.S. retailers offer free shipping both ways and data show when retailers offer free shipping, sales growth outpaces returns. Free returns are integral to customer retention. As ecommerce penetration continues to rise and retailers are likely forced to maintain generous free shipping/free return policies, profitability, where there is any, will vaporize. The “Try Before You Buy “mentality is here to stay!
ZigZag Global is solving the return problem and addressing the eroding profit problem for the ecommerce industry. Based in Britain, ZigZag was founded 2015 by Al Gerrie and Laurence Guy. Its client list includes Arcadia Group’s Burton, Dorothy Perkins, Evans, Miss Selfridge and Topshop. In addition to reduced return costs, retailers gain insight into consumer behavior and supply chain performance base on return data such as color and product descriptions, local sizing, manufacturing errors and serial returners. On the front end, ZigZag provides retailers with branded portals for consumers to schedule returns with multiple options (including exchanges). On the back end, ZigZag provides a SAAS platform that tracks all stock via its warehouse network and 55 courier partners. The software’s predictive analytics decides at the warehouse how to process and route the return based on demand: consolidate, resell, wholesale, and/or refurbish (dry-clean, repackage and box). Zigzag’s future looks strong. Gerrie elaborates, “In addition to all ecommerce fashion pureplays such as ASOS and Zalando, there are all the 3rd party small to medium size enterprises selling on the Amazon Marketplace, and then there are couriers, where millions of returns create traffic problems and they don’t have the warehouse network to consolidate.”
Its network of 200 warehouses in 130 countries connect more than 320,000 drop-off points in Europe alone, removing multiple pain points along the return continuum. ZigZag grades and refurbishes goods locally thereby returning products to the supply chain more rapidly (and reducing the impact of aging fashion inventory). Zigzag reduces parcel journey length as much as 65 percent and can save retailers more that 50 percent on transportation costs.
ZigZag is the recipient of numerous innovation awards, including Shoptalk’s (October) 2017 Startup Pitch capturing €25,000 in a contest of 13 innovative retail tech entrepreneurs; in March, ZigZag won the 2017 Sustainability Innovation Award in Milan; and Internet Retailer, The World Retail Congress and others have recognized ZigZag. ZigZag has raised just over $1m via crowd and seed funding and will likely raise a multimillion Series A in 2018.
The full report is available here: Copyright acknowledged - The Robin Report.