Have you ever held off on ordering something you wanted — maybe a cute blouse or bag or a face cream your favorite influencer absolutely could not stop raving about — because the return process or refund policy wasn’t clear?
Or perhaps you ordered the thing, only to discover it wasn’t everything you’d hoped for. But instead of dealing with the hassle of boxing it back up and taking it to a shipping company in the hope of getting your money back, you decided to cut your losses and keep it tucked away in your closet.
Chances are, you’ve been in both situations. You’re certainly not alone. Americans waste millions on unwanted products yearly and decline to spend even more due to complicated or uncertain return-and-exchange policies and processes. It’s one of the least fun things about digital commerce.
And it’s even worse on the retailer side. Generous return policies are table stakes for small and midsize retailers looking to compete with the big boys. They’re also complicated and expensive to manage, prone to fraud, subject to the whims of third-party logistics providers, and needlessly wasteful of primary resources like fuel and packaging. Each of these pain points is a grave threat in a hyper-competitive digital commerce environment.
Sway: Returns, Exchanges, & Deliveries Done Differently
Good news: Someone is doing something about it. That’s Sway, a fast-growing logistics startup formerly known as Returnmates.
Eric Wimer and Kristian Zak founded Sway in 2020. Like many of us, Wimer and Zak have seen the ugly side of returns and exchanges as consumers. Unlike most of us, they also have deep logistics expertise; Wimer was an early Uber employee who helped scale its rideshare and Uber Eats delivery platforms during its rocket-ship growth phase.
Sway is fresh off a $19.5 million fundraise led by 7GC, an international growth investment firm that backs promising digital solutions with disruptive global potential. Blackhorn Ventures, Lightshed Ventures, and Rise of the Rest Revolution also participated. Sway currently operates in about two dozen cities across California, Florida, Maryland, New York, Texas, Virginia, Washington D.C., and Washington State, and it’s eying new markets in 2024.
The lightbulb moment for Zak and Wimer came during a particularly frustrating experience dropping off a return package at the post office. The pair realized that corporate logistics providers couldn’t care less about the customer or retailer experience as long as they got their money.
They saw an opportunity to do things differently — to build a modern shipping and returns partner that understands users’ expectations and responds to their needs. They envisioned a kinder, gentler, faster experience for parties on both sides of the transaction. They knew that if they executed well, they’d solve not only consumers’ and retailers’ pain points but also create a new vector for brand loyalty.
“Up until today, shipping services have been treated like commodities,” explains Wimer. “With Sway, we provide brands an opportunity to delight their shoppers with each delivery and return, keeping brands closer to their customers.”
It’s also a rare retail logistics solution that actually pencils out. And this is why 7GC and its co-investors found Sway so appealing.
“Sway is fixing the decades-old returns problem…with a business model that actually makes sense. Merchants reduce leakage, and customers purchase more with a truly seamless two-way supply chain,” says Jack Leeney, co-founder and managing partner of 7GC.
How Sway Works
Another aspect of Sway’s appeal is its simplicity. It’s easy for everyday consumers (and sellers) to grasp.
Sway’s returns solution is set up to eliminate the customer-side hassle of packing up and dropping off a return package at a shipping company or central mailbox. Instead, they leave it on their doorstep to be picked up by a Sway driver partner — an independent contractor who’s likelier than not to have considerable experience in the last-mile logistics space.
Sway applies the same logic to its newer last-mile delivery solution, which enables both first-time deliveries (that is, original order fulfillments) and exchanges for previously or simultaneously returned items.
Sway’s approach reduces friction for the consumer, saving them a trip out of the house and a possibly lengthy wait in line. That, in turn, reduces their hesitation to buy stuff they’re not quite sure they’ll like in the first place. For retailers, the benefits are even more remarkable: less return fraud (thanks to direct line-of-sight on returned items), a lower unit cost for returns and exchanges, and faster return processing overall.
The Numbers (And Users) Speak For Themselves
Wimer, Zak, and the rest of the Sway team believe their solution speaks for itself. The topline numbers indeed tell an impressive story. Sway’s typical business customer sees:
- 99% on-time delivery, far above the industry average
- 66% reduction in lost package rates
- 20% reduction in freight costs
- 75% reduction in total cycle times — from 7-10 days or more to under 2 days
- 20% increase in repeat purchase rates
Speaking of customer satisfaction: In digital commerce, the real sign of success is social proof. Sway has that in spades too, with an average customer satisfaction score of 4.9 out of 5 (from in-app responses) and a Net Promoter Score of 75 on a scale of -100 to 100 — meaning its customers are very likely to recommend Sway to others.
This isn’t much of a surprise, considering many of those customers publicly rave about the Sway experience. Esther calls Sway “the quickest and easiest [return and exchange] process ever,” and Amy points out that “being able to actually speak to someone in real time over SMS was extremely convenient.”
All this is music to the Sway team’s ears. “When you maintain an open channel with the shopper, deliver their package seamlessly, and pick up their return if it doesn’t work out, you redefine the shopper’s relationship with the brand,” says Wimer.
What’s Next for Sway?
So, what’s next for Sway? Fresh off its expansion into more than 25 metro markets, the company has big plans for 2024 and beyond: deepening relationships with existing brand partners, forging new ones, finding new ways to reach end-users where they live and work, and expanding its geographical reach to become a truly nationwide logistics provider.
Sway is also gearing up to tap a partner market that Wimer in particular is deeply familiar with. In 2024 and beyond, he and Zak are doubling down on their efforts to build trust with the independent logistics partners who power Sway’s last-mile solutions.
Wimer’s experience at Uber and Uber Eats taught him that drivers reward gig marketplaces that are transparent about earning potential and clear on what each side can expect from the other. Many Sway partners are familiar with app-enabled transportation and logistics services already, and they know that it’s easier to move packages rather than people. This trust-building effort will be critical to Sway’s growth in the months and years ahead — and could eventually position it as North America’s premier provider of integrated shipping, returns, and exchange services.