Selling things online is easy. Returns service no. But with software veteran Amena Ali at the helm, Optoro is helping some of the largest retailers—like Ikea, Gap, American Eagle, and Best Buy—create a seamless returns process.
The software-as-a-service company achieved breakthrough in 2020 with its signature “express return” feature, which allows customers to return unpacked products to stores like Staples, and has since been rolled out to greater than 1,000 stores. Opto continued to adapt its returns process and in summer 2023, the company launched its home pickup service, which is now available in 40 cities.
“The idea of using technology to promote circularity and create a more sustainable retail sector resonated deeply with me,” says Ali. “Not only do we make returns less hassle; we are transforming it into a strategic asset for retailers, reimagining the reverse logistics supply chain and, more broadly, making it a force for good for the planet.”
Last yr, the company saw a 35% year-on-year increase in units processed and a 40% increase in express returns volume, and there was a significant increase in the variety of brands using the Optoro portal. All of this made Ali a finalist on our Entrepreneur 2024 list of 20 progressive leaders.
Maintaining customer satisfaction with returns processes while reducing return costs for retailers is a complex task. How does Optoro help its customers maintain their loyalty?
A one-size-fits-all approach really is not the right solution because you are either too lenient or too strict, regardless of what your principles are. The things we present help retailers manage returns intelligently and thoughtfully. Let’s start with what the shape of the returns portal is and what options are available there. For example, if Rachel is a trusted customer, a loyal customer of mine, I need to make it as easy as possible for her to buy product A, and if it doesn’t fit, replace it with product B without having to attend. We bring in data science and modeling to say that Rachel is a trusted customer and actually offer to ship item B to Rachel immediately, even before Rachel returns item A, because that’s the sort of trust and commitment we have with Rachel. While Shanna, possibly she’s a recent client. I do not know what her profile is and possibly I won’t be as lenient towards her, possibly it’s more of a standard exchange.
Since you became CEO, have you made Optoro more focused on data and AI?
Categorically. This has at all times been something that has been the company’s distinctiveness. I’d say that what we have done now has really refined our partner strategies so that we have partners that deal with logistics, the actual flow of products from point A to point B, and we also have partners that deal with processing. So we have software that helps with receiving and distributing. Liquidation – what to do with it, is it price repairing? And if so, what channel? Should I send it to a discount store or send it to liquidation? Things like that. I’d say that at Optoro we have at all times touched on this topic, but we have really doubled down on it because this is the future and it’s truthfully the best strategy to work out what’s the right solution for the buyer and the seller and the planet.
Were there any recent features or changes you were most excited to see in Optoro?
Since returns are a secondary issue for many brands and retailers, they say, “Hey Optoro, we will not understand [what to do with our returns.] It’s too complicated, but there’s too much money in it. Can you maintain this for us?” We tended to get into processing not because we at all times really desired to do it, but because there have been no other options. I’m really pleased that we have now partnered with what are called 3PLS or third party logistics players so that our software can work with labor management, warehousing and warehouse management capabilities to supply a solution. I’m very happy with this variation that we have made and we have also made more investment from a data science and modeling perspective to work out how you may get predictive analytics that really helps determine what solution is right for the right group of consumers, right for the customer and appropriate for the seller.
There has been significant revenue growth since you joined the team. What do you think was the key to this?
Three things – these are really customers, product and partners. The smartest thing that happened was we launched our entire returns portal and express returns capabilities, which enabled us to work with a lot of massive clients in the country, and then we partnered with a few people to make that possible. With that in mind, our focus is not only on growth, but also on profitability, which really comes from our focus on software and how it really works, corresponding to with Locus Robotics or recent partnerships.
Are there any other highlights of 2024 that you are particularly happy with?
More generally, we’re in the era of information and personalization, so some of the partnerships we’re looking at immediately are other data firms and how we are able to provide more intelligence and that sort of personalization. It could possibly be a drop off point near you, it could possibly be adjusting your returns policy, it could possibly be fraud detection to handle this individually. So I’m very excited about our ability to do that.