Startup Easing Ecommerce Returns Logistics Raises Investment From Maersk Growth

ZigZag, a London-based returns logistics startup, has raised strategic investment with Maersk Growth, the investment arm of shipping giant A.P. Møller – Maersk. The startup cashes in on the returns logistics economy, helping e-commerce retailers manage their returns without complications. 

The rise of e-commerce has parallelly led to the growth of product returns — a bitter pill to swallow for e-retailers, but an unavoidable part of an e-commerce transaction nevertheless. Though product returns have always had a place in brick-and-mortar storefront logistics, the rate of returns on e-commerce channels is much higher. 

Reports estimate that at least 30% of all products ordered online are returned, compared to storefronts that witness roughly 9% in returns. This could be due to various reasons like having received a wrong item, damaged products or because the product looks different from what was displayed on the site. 

E-commerce returns logistics is a lot harder, as it involves the e-retailer managing the logistics behind taking back the product, which is not usually an issue with a storefront as customers are expected to get back to the store for a return. 

Ever since the "Amazon effect," businesses are increasingly looking to put customers at the center of their operations, leading to an escalation of consumer expectations with not just the speed of delivery, but also the ease at which they can opt for product returns. The e-commerce market continues to grow at over 20% annually, which invariably will compound the returns logistics problem in the years to come. 

"Returns have increasingly become part of the ‘new normal' for e-commerce and multichannel retailers and returns logistics continue to drive significant cost, complexity and waste in the retail supply chain," said ZigZag in its statement. 

ZigZag's software platform addresses this issue by providing granular visibility into the returns pipeline while driving seamless coordination between service providers. Apart from simplifying the returns process for both the consumers and retailers, it also expedites the flow of returns, improves on customer engagement and returns options, while simultaneously cutting down on the costs and waste associated with retail returns. 

"We are delighted to welcome Maersk on board as an investor and strategic partner, as we continue our mission to provide a market-leading returns solution," said Al Gerrie, the founder of ZigZag. "In addition to allowing us to reach more customers whilst remaining carrier agnostic, the funding and Maersk's extensive reach and expertise will allow us to further develop our product offering to deliver even more value for retailers throughout the supply chain."

Studies on ZigZag customer performance point to costs and waste reduction of up to 57%. The company also shortens parcel journey lengths by up to 65%, made possible by enhancing visibility across the returns supply chain and leveraging data to optimize operations. 

"We see significant value in the strategic alignment between Maersk's position as a global leader in logistics and transport and ZigZag's powerful returns solution," said Ian Nolan, director at ZigZag. "ZigZag is a great example of a company actively decoupling commercial growth and value creation from resource constraints, enhancing productivity to drive competitive advantage. We welcome Maersk onboard as a fellow investor and look forward to working closely with them to continue to support the growth of ZigZag going forward."

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