Greenlist Decarbonizes Online Retail Returns
Interview with Jess Owens, the founder of Greenlist - a software powering peer-to-peer returns for retailers and their customers. Greenlist reduces the carbon footprint of online retail returns.
Greenlist powers peer-to-peer returns for retailers, decarbonizing online returns while saving retailers money and enabling customers to access out-of-stock inventory. After going through New York Fashion Tech Lab’s program, the Greenlist team is working to grow its client base of online retailers.
I spoke with Founder & CEO, Jess Owens, about her founding journey, mission-first approach, and growth plans for the rest of 2023.
Jacob Sheldon: Can you introduce yourself and your company?
Jess Owens: I'm located in Falls Church, Virginia, right outside of DC, and the name of my company is Greenlist. Greenlist is a technology that enables peer-to-peer returns. Right now, when you return something you bought online, for instance, a jacket or a pair of shoes, that merchandise travels back to a warehouse, a store, or a trash can. With Greenlist, that return instead goes directly to another consumer. We're calling this peer-to-peer returns, and we quite simply are cutting out the middle steps and sending it directly from one house to another house.
Jacob: That's a really cool idea. How did you come up with it?
Jess: It's from a personal problem I had while shopping online, and a jacket sold out of my shopping cart. I was totally obsessed with this jacket and had to have it. I reached out to the store, and asked, “Can you connect me to a return of this jacket?” I knew 30 to 40% of those jackets would get returned to the store. They couldn't do this. In fact, no store is able to connect shoppers to returns. I thought, why can't we do that? That's nuts. I quit my job and set out to solve my own problem. I built a small team of advisers around me, and I got to work.
One thing that I quickly realized through a lot of research on the industry is that returns are incredibly pollutive. They travel back and forth across the country. They pile up in warehouses. They're shipped abroad, they're trashed. As I continued to think about the problem I had, I thought the most sustainable approach to solving this is to send that jacket directly from your house to my house because it doesn't fit you or you don't like it, but I want it, and I'm waiting on it. That's how we came to the solution.
Jacob: It seems like a no-brainer kind of solution. Why don't the companies do this on their own?
Jess: Well, there are a few reasons. E-commerce returns have been processed one way for the past 20 years, so it's a really big leap to change something you've always done in a certain way. That is part of the pushback we've gotten from companies; it’s a totally new concept. As well, a little bit of the pushback we've gotten from investors is because they often want to see something that's already working in the market. Since we’re the first in the market to do this, it’s definitely more challenging.
Jacob: Could you tell me about the problems you're solving for companies?
Jess: Retail returns are very expensive to retailers. In fact, last year, they cost companies over $800 billion and shipping costs also continue to rise up to 10% annually. Warehouse fulfillment costs are on the rise as well. All of the retailers’ expenses are increasing substantially, and on the other side, over 6 billion pounds of returns go to landfills every year. Retail returns are bad for the bottom line, and they're bad for the planet.
Jacob: Can you explain how your solution is solving these two problems?
Jess: Because of our peer-to-peer model, we're cutting out at least one leg of the shipment. That immediately reduces the cost significantly and is one of our biggest selling points. As I also mentioned, many returns go directly to landfill - up to 50% is what some people estimate. By reducing the number of returns that go back to the retailer, we are cutting back on the number that go to landfills. We're also reducing carbon emissions and cutting packaging waste in half because we ask users to reuse their packaging.
Jacob: For you, personally, do you vibe more with the climate problem or the cost issue?
Jess: Definitely more on the climate side. When I started the business, jumping into something like this was hugely risky. I have always been very concerned about our planet and, as a mom, I worry about my children’s futures. . We do things in our home like compost and save water, anything we can to minimize the impact that we're making as a family. I thought, if I could work towards something that makes even a small difference for our planet, then my life's work would be meaningful. That really resonated with me from day one, and quite frankly, it’s what has kept us going through all the very hard times.
Jacob: I'm sure it's at least a little bit easier to have the retailers calculate their cost savings from using Greenlist, but how do you or your customers quantify your impact on the climate?
Jess: In this early stage we are focused on verifiable improvements that our model makes in the traditional return and resale process. We're able to calculate the number of miles that our process reduces and the items travel, which we use as a barometer for our emissions. We've also used Flexport's carbon emission calculator to approximate the emission savings, and we say there's about one pound of CO2e (carbon dioxide equivalent) reduced per package. The packaging waste as well is cut directly in half. In the future, we hope to do a full LCA because we’re still approximating our numbers at this point.
Jacob: How many retail partners do you have?
Jess: We have one big partner on board, and then we have five other very small retail companies, and those are all apparel, but we also have one furniture pilot running in the Bay Area. Furniture is a completely different beast, but it's been lucrative, and the waste that it's cutting down on is significant as well.
Jacob: Can you describe your target customer’s profile?
Jess: Our target shoppers include Gen Z and Millennials. They are already shopping peer-to-peer companies like Poshmark and Facebook groups so they are very familiar with this concept. On the retailer side, we are focused on shoe, apparel and furniture clients. Ideally, companies that get a lot of new-with-tags returns.
Jacob: How large is the market?
Jess: Returns grew from $760 billion in 2021 to $816 billion in 2022. It will be a trillion-dollar problem in the near future. Online shopping has increased more than 95% in the past five years, so clearly, the numbers are skyrocketing. Plus, COVID didn't help. People stopped going into stores and started primarily shopping online which has encouraged behaviors like bracketing - ordering two sizes of the same item with plans to return the one that doesn’t fit.
Jacob: What are you doing to expand? What’s working and what's not?
Jess: Last year, we participated in a program called New York Fashion Tech Lab, and it was a phenomenal opportunity. It’s run by about 10 massive retail partners such as Macy's, Calvin Klein, and Kate Spade. They picked five founders working on problems that they're interested in. Being selected for the program was a huge honor, and it put us in front of the biggest companies in the world. We spent three months with those groups and walked away with strong relationships and a lot of feedback on how we could best serve enterprise clients. It opened a lot of doors for us in the industry.
Beyond that, we are trying all the traditional marketing channels such as paid ads, LinkedIn conversations, newsletters, content networking, events and strategic PR. Our most effective tool, however, has been our constant outreach and networking with industry experts. This has really helped us build our pipeline.
Jacob: What is your sales process to retailers like?
Jess: We start with questions to help us understand how the company currently handles returns, how big of a pain point this is for them and if they are motivated to try new solutions.
We then describe, at a high level, what greenlist is. We show them our customer journey map and then we demonstrate the product working on Vestique, the large customer that we are partnered with. We take questions and ask if greenlist is a solution they would try. We end the call asking who we should meet with next.
Because our solution touches many different departments, we have to get buy-in from the following teams: logistics, marketing, sustainability, e-commerce and finance. The sales cycle for a tech technology is a long and arduous process.
Jacob: How easy is it for retailers to implement Greenlist?
Jess: Our solution is a customized Shopify app so we are currently focused on Shopify users. Onboarding new clients is easy - our engineers complete the integration and are finished in under a week, with no work needed by the retailer. We are also in conversations with companies who use other e-commerce platforms such as Salesforce. A Salesforce integration would be more work on our end but our goal is to make this as easy as possible for everyone we partner with.
Jacob: Let's say I'm a customer on the receiving end of a peer-to-peer return. What happens if the product is damaged or poorly packed? How do you protect against this happening?
Jess: Greenlist transacts new-with-tags returns only. During the return process, the "returning customer" has to qualify that the item is unworn and in perfect condition. If the end customer receives the item and it is not as it was described, they reach out to us, and we handle it on a case-by-case basis. We have a customer-centric approach and approve refunds as needed. Fortunately, we haven't had any issues with quality control yet. We attribute this to our communication throughout the process and our focus on Gen Z and Millennial shoppers who are already well-trained in the peer-to-peer model.
Jacob: What did you do before Greenlist?
Jess: I worked in marketing and business consulting. I helped many different entrepreneurs across a variety of industries. My work ranged from helping companies build their identities and launch their businesses to fixing internal problems and scaling to new markets. My goal was to do a deep dive and really understand the business and then create an actionable plan to help them thrive.
Jacob: Did you already have some of the customer connections for Greenlist from your career?
Jess: I actually didn't, which has been another challenge. I jumped from consulting into building technology for the retail industry. Despite this, I’m very proud of the network I’ve built - we’ve spoken with many of the largest apparel companies in our country.
Jacob: As well I imagine product development was outside of your wheelhouse when you started Greenlist. How did you go about filling that gap?
Jess: It was! One of my first steps was to build a group of advisors around me who worked in retail, technology and sustainability. These advisors helped me fill in gaps that I needed to understand to build a successful product. One of my earliest teammates, Eric, worked in corporate retail for over 15 years. The two of us partnered closely to develop the first iteration of greenlist.
Jacob: What would you say is one thing you do really well as a company?
Jess: I'm very proud of effectively introducing a new concept to the industry. A woman from Germany contacted me recently because she heard of us during Berlin Fashion Week.
We’ve gotten a lotof interest from the press, and that started even before we were launched. People are excited about our mission and want to see us succeed.
Jacob: What’s one thing that you've struggled with as a company?
Jess: I've struggled with raising money. Female founders get less than 2% of venture funding, and that's been a really hard barrier for me to break through. That has also affected my confidence as a founder. There are VCs that have pursued us, and then we hear no, over and over again. I know that's a very common story for entrepreneurs, but it's still really hard to deal with.
Jacob: What have you done to try and get around that?
Jess: I'm focused on sales and just getting as far as we can with the funding that we do have. We raised a great round from friends, family, angels, and a small angel group. We have been successful enough to get us to our next milestones. My goal is that we can go back to those VCs that turned us down and restart the conversations after we make more progress.
Jacob: What's one piece of advice you have for other entrepreneurs?
Jess: Build a community of other founders around you. That has been hugely valuable for me. You can do this through an accelerator or other networking opportunities, but it’s vital that you do because nobody understands the journey you're going through quite like other founders. It’s impossible to explain the intense highs and lows that entrepreneurs experience. The founders I’ve met have been incredibly supportive throughout this process .
Jacob: What would you say is your biggest blocker right now?
Jess: We need more retail partners on board. Because we're a completely new concept and because retail is a risk-averse bunch it's been hard for us to quickly onboard a lot of companies. We’re hoping that 2023 will be a big year for us because we've seen really good results from our early partners in 2022. The returns that we transact are 50% more profitable and travel about 52% less miles. We are ticking both of the boxes and making companies more profitable and more sustainable at the same time. We need to show this to other retailers in a meaningful way that will drive them to take the next steps.
Jacob: What's your long-term goal for the company?
Jess: We want to change the way that people and retailers think about returns. Most returns are in sellable shape before they reach the warehouse dock and we want retailers to take advantage of this. The moment that someone starts to make a return, we need to have more efficient processes and systems that handle the return. By enabling the peer-to-peer model, we're doing exactly that and allowing stores to capture more profit and be more environmentally friendly.
Jacob: Who is on your team and why?
Jess: My co-founder is Ashley White. She is a front-end developer and a UX/UI expert. The two of us have worked together for over eight years. She was the first person I called when I had this idea. Ashley started researching the feasibility of what I was envisioning and her technical background allowed her to instantly make an impact. Ashley is responsible for all of our branding and design assets and she also oversees our developers. The third member of our team is Zack Whitacre and he is my Chief of Staff and Head of Operations. Zack is a jack of all trades. He worked on the finance, operations and sustainability teams at Bonobos for more than 8 years. . Zack’s retail background is so valuable to the company.
I also have a few consultants helping us with marketing and our go-to-market strategy. I can't fail to mention my wonderful board of advisors who have helped us with everything from starting the business to connecting us with people and helping us understand the market and how to move forward.
Jacob: So it's very clear that you care a lot about the climate. How do you personally feel the effects of climate change in your life?
Jess: The weather has been one thing that is very clearly changing as the planet warms up. The intensity of storms have increased and communities are devastated by forest fires, floods and droughts. Our reliance on fossil fuels and modern conveniences have built unsustainable habits across the globe and we have less than 10 years to turn things around. We have to make drastic changes, adopt new models and all work together to improve our planet’s health.
Learn more about Greenlist’s peer-to-peer returns for retailers.
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