Digital retail is changing—maybe more than we realize.
"Digital retail 1.0," where shoppers could choose from a messy array of website-based, digital-native retail platforms depending on the product category, is long gone. Amazon was always the elephant in the room, but it has consolidated market share across product categories to the point that it dwarfs its nearest U.S. competitor.
Yet the story of digital retail today is not simply, "Amazon ate everything." In fact, the online marketplace is more fragmented than before.
It's not only that Amazon faces competition from "brick-and-mortar first" retailers like Walmart and Best Buy that have finally decided to get serious about e-commerce. It's that there are more independent e-tailers than ever. With increasingly predictive micro-targeting algorithms and more powerful behind-the-scenes tools to keep lean retailers on equal footing (or nearly so) with better-capitalized rivals, now is actually a really good time to get into business.
If you have the right tools.
Sway, formerly known as Returnmates, is a potential game-changer for any digital retailer that needs to manage high return and exchange volumes. Which, at this point, is most digital retailers. Years of experience in the digital sales space—and painful personal experience on the consumer side of the equation—went into building a simple yet transformative solution that reduces friction throughout the digital supply chain and improves the sales and fulfillment experience for customers and sellers alike.
What Are the Biggest Pain Points for Online Sellers and Shoppers?
To understand how Sway works and why it's so good at what it does, we first need to understand why the online retail experience is broken.
While it's true that most transactions go off without a hitch—at least relative to shoppers' low expectations—the share of "problem" sales remains unacceptably high. Both sellers and shoppers suffer as a result.
For Online Shoppers
You might not think of yourself as a high-maintenance consumer. You have ample patience for logistical hiccups and supply chain issues because you know small e-tailers can't control everything. You're fine if you get your purchase in a reasonable amount of time and don't pay more than expected.
Yet, if you're being honest, you've probably had an e-commerce experience in the past year that fell short of even these low expectations. Perhaps you've had one in the past month or the past week. You wouldn't be alone.
These substandard experiences happen for a variety of reasons:
- Cumbersome return packaging. Retailers might tell themselves their return packaging is easy to figure out, but customers often tell different stories. And as one of the first potential points of friction during the return or exchange process, it's important to get it right.
- Confusion over return protocols. These days, basically every online retailer allows returns or exchanges. Yet, these policies are anything but standardized. And that's a big issue for consumers who buy from numerous different retailers. It's no accident that simplicity is one of Sway's top selling points built into the core of its tech.
- Confusion over exchange policies. A complicated or vague exchange policy adds friction at the point of sale. Many consumers abandon purchases they'd planned to make—or go to another retailer—because they're not clear on whether, when, and how to make exchanges (and because they, understandably, don't want to waste money). Sway's solution also addresses this issue by enabling retailers to offer clear and realistic exchange protocols from the outset.
- Long waits at dropoff sites. Unless you've been very fortunate, you've probably waited longer than you'd have liked to drop off a return or exchange at a delivery provider. Especially if those returns coincided with the busy holiday shipping season, as is often the case. This is the pain point that convinced Sway co-founders Eric Wimer and Kristian Zak that they were onto something, in fact.
- Shipping delays after dropoff. Dropoff is just the beginning; the real action comes next. The retailer's third-party shipping partner processes the order and returns it to the warehouse. At least, that's the hope. Any number of problems can muck things up, from weather delays to equipment breakdowns to communication snafus.
For Online Sellers
As bad as the status quo is for consumers, it's worse for sellers. After all, the stakes couldn't be higher when your livelihood is on the line. It only takes a few bad reviews to ruin a digital storefront's reputation and cripple its growth potential.
Unfortunately, a lot can go wrong throughout the return and exchange processes. Any of the consumer pain points described above may contribute to negative customer experiences. Other issues affect retailers even more directly, too:
- Carts abandoned due to confusion over return and exchange policy. Sway founders Zak and Wimer knew that confusing return and exchange policies affect retailers as much, if not more, than they affect buyers. After all, a deferred purchase is annoying for the consumer but not really a big deal for them in the long run. For retailers, a pattern of deferred purchases—not to mention public complaints about return and exchange policies—can be an existential risk.
- Issues with third-party logistics partners. Online retailers place a great deal of trust in their third-party logistics partners. The favor isn't always returned. And even under ideal circumstances, consumers don't care who handles their return as long as they get their money back. Wimer explains that until recently, shipping services have been treated like commodities. In contrast, he adds that Sway "provide[s] brands an opportunity to delight their shoppers with each delivery and return, keeping brands closer to their customers."
- High fuel and packaging expenses (and waste). Generous return and exchange policies consume resources: fuel, packaging, labor, and time. Some waste is inevitable along the chain, but retailers and logistics providers can do much better. By streamlining returns and exchanges and allowing customers to remain in their homes throughout, Sway helps cut costs for lean retailers while blunting their return policies' environmental impact.
- Return and exchange fraud. Outright fraud is shockingly common in the digital retail space. It already costs retailers tens of billions of dollars each year, and it's growing more common and sophisticated as artificial intelligence improves. With verified in-person pickup and a high-tech, responsive, near-real-time chain of custody, Sway's solution shrinks the attack space for e-commerce fraudsters and increases retailer confidence that their "customers" are who they say they are.
How Sway Improves the Digital Retail Experience (On Both Sides)
Sway is a last-mile solution for e-commerce providers. Its proprietary technology enables a network of independent logistics professionals to deliver and pick up merchandise at customers' homes and workplaces with less friction and fewer potential points of failure. Sway's name is representative of the two-way connection forged between retailer and customer.
"Sway is fixing the decades-old returns problem...with a business model that actually makes sense," says Jack Leeney, co-founder and managing partner of 7GC, who led Sway's most recent funding round, raising nearly $20 million for the growing company.
Leeney sums up Sway's value proposition in one sentence: "Merchants reduce leakage, and customers purchase more with a truly seamless two-way supply chain," he says.
Sway's value goes beyond efficiency and expediency. With responsive tech that brings third-party logistics out of the shadows and into the 21st century, it empowers brands to redefine their customer relationships and drive loyalty at scale.
"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.
That reflects well on Sway itself. The app has a near-perfect customer satisfaction score (4.9 out of 5) based on in-app responses and a Net Promoter Score of 75 on a scale of –100 to 100. Both data points mean end-users (and delivery partners) are highly likely to recommend Sway.
Qualitative feedback is positive as well. One buyer compares Sway as a positive alternative to other leading logistics providers. Another raves about its real-time SMS capabilities, which "traditional" logistics apps lack. A third summarizes the Sway-enabled return process as "the quickest and easiest ever."
Sway differentiates itself—and the merchants using it—across the value chain. Notable data points include:
- On-time delivery rates (99%) well above the industry average
- 20% reduction in delivery costs
- Total cycle time reduced by 75%—from 7–10 days (or more) to under 2 days
- 66% decline in lost packages
- 20% increase in repeat purchases
Is Sway the Future of Online Shopping and Selling?
Sway is one of the year's most compelling retail tech stories. Co-founders Zak and Wimer plan to double down in the months to come as they roll out their solution across the United States. They're already operational in close to 30 cities in Virginia, Washington State, California, Florida, New York, Maryland, and Texas, and if the rollout goes well, Sway's footprint could double or triple in size in the not-too-distant future.
So, is it fair to say that Sway is the future of online shopping and selling? It's certainly a compelling solution to a number of very real, very troublesome pain points for shoppers and sellers alike.
But like every retail tech solution before it, Sway's growth will come down to execution. If Zak and Wimer can deliver on their app's promise, the sky's the limit. With industry experts betting that'll be the case, expect to hear more about Sway soon enough.
