The following interview is a conversation we had with Oscar Rundqvist, CEO & Co-Founder of eComID, on our podcast Category Visionaries. You can view the full episode here: $3 Million Raised to Build the Future of Return Reductions
Brett
Welcome to Category Visionaries, the show dedicated to exploring exciting visions for the future from the founders who are on the front lines building it. In each episode, we’ll speak with a visionary Founder who’s building a new category or reimagining an existing one. We’ll learn about the problem they solve, how their technology works, and unpack their vision for the future. I’m your host, Brett Stapper, CEO of Front Lines Media. Now let’s dive right into today’s episode. Hi, everyone. Welcome back to Category Visionaries. Today we’re speaking with Oscar Rundqvist, CEO and Co-Founder of eComID, a return reductions platform that’s raised over 3 million in funding. Oscar, how are you?
Oscar Rundqvist
Hey, Brett. All good. Thanks for having me.
Brett
No problem. Super excited. Let’s go ahead and jump right in. Talk to us about what you’re building today.
Oscar Rundqvist
Yes, thanks. Yes. I’m the Co-Founder of eComID. We help retailers to reduce product returns. So that’s what. Yeah, what we do.
Brett
And talk to us about the founding of the company. What were you doing before this? And then what was happening in your world that made you say, yep, I’m going to build a company around this?
Oscar Rundqvist
Yep, happy to. So before founding eComID, almost exactly a year ago, actually, I was working at HNO, leading the digital customer experience there. I realized hands on how extremely broken the product returns space is. And I realized also that the market is really missing some solutions to it. So that was what made me motivated to find something and to basically help brands to tackle this problem, which is a really complex one.
Brett
And what makes the problem so complex?
Oscar Rundqvist
I think it’s one thing was over the pandemic. Really good question, by the way. So between 2019 and 2022. So during the pandemic, amount of return was almost like, free doubled in the US, only there was product return worth around, like $800 billion. So I think one reason was that the customer behavior back then changed because the physical selling, like, got completely out of the way. So brands needed to compensate with that to really accelerate online selling. And I think that led to a quite irresponsible shopping behavior online, and that had now got stuck. So customers are shopping in a way they’re bracketing, meaning that they buy the same products in multiple sizes, et cetera, which has led to return rates often up around 50%. But also the responsibility on brands, of course. For example, sizes is different between two brands.
Oscar Rundqvist
Like, one medium in one brand could be small in other brands. So there’s also that kind of complexity that brands calls in a way where customer cannot expect to buy the same size across different brands. So, yeah, it’s a lot of reasons, but I would say that too.
Brett
I don’t know, I don’t want to snitch on anyone, but I know who the problem is. It’s my wife. I see my wife do this all the time, especially during the pandemic. She would buy like, you know, ten different dresses, get them shipped, choose one and then ship the others back. So I can see it from a consumer behavior perspective that it just became very common over the pandemic. Do you think that, how does that change or how do you solve that problem? Because consumers are very used to doing that. How do you make them not do that?
Oscar Rundqvist
Yes, and by the way, female customers are a more problematic customer segment when it comes to returns than men. So, yeah, I said the same thing in my household. We help brands do this in a proactive way. So we are pre purchased product returns reduction technology. For example, we help brands with, we call it kind of green nudging, meaning that we in the brands experiences, we nudge the customers and inform them, educate them about the environmental impact of returns. And we’ve seen studies that just doing this can lead to like a more than 2% decrease in returns and not affecting revenue. But then we also create different kind of incentives for customers with the brands we work with, for example, that return policies can change depending on how much return.
Oscar Rundqvist
So that if you’re like, not returning a lot and shopping in a responsible way, you will get better return policies than customers that are returning in a not so responsible way.
Brett
That makes sense. I’m going to tell my wife you’re not returning in a responsible way. That’s my new line today. I’ll say, Oscar told me it’s not me.
Oscar Rundqvist
Yeah.
Brett
When it comes to the category, is it a return reductions platform or how do you think about the market category that you’re in the.
Oscar Rundqvist
Yes. So what we’ve seen is that there are a lot of really good startups and innovators within returns management. So post purchase, helping brands to deal with the returns when they occur. But what we saw is that there are fewer brands and startups that help brands reduce the returns proactively. So that’s where we position ourselves. So before the purchase been made, we lower the likelihood that every kind of shopping or shopping journey will lead to a return purchase. And then we nudge the customer throughout the customer journey and, yeah, trying to limit the, and reduce the risk that this purchase will lead to return.
Oscar Rundqvist
So it’s through this kind of educational piece, making customers aware about the fact that, yeah, online returns is a huge environmental issue, but also this kind of incentives that I talked about as well as guidance, knowing, for example, if you bought a pair of pants in one size two months ago and you returned it, then you bought another pairing, another size, then we remember that for customers and recommend can recommend that size. So, yeah, that’s where we position ourselves because we want to really tackle the problem before it occurs.
Brett
And then is this a line item that you’re seeing companies start to establish given the consumer behavior that changed, given the return problem, do they have a line item that they’re saying, okay, I need to go and find some software to solve this return problem, or what’s their typical thinking there?
Oscar Rundqvist
Yeah, I think definitely brands have started to realize that returns to is one of the fashion industry’s biggest challenges right now. So they realize, oh, this is something that we really need to do something about. And often the problem has been, and still is that the accountability and ownership within the brand’s organizations is quite scattered. So it’s not clear who has the biggest ownership for returns, but it’s definitely, yeah, like I mentioned in the beginning, when brands have return rates on average around like 50%, it’s one of the biggest for sure cost components on the PNLs if you look at it holistically. But right now, brands tend to look at it in vertical. So one team just is their kind of impact of the returns, but not the full effect.
Oscar Rundqvist
So we said that brands have started to realize this is a big area to improve on. But since the category that we’re inventing, kind of returns reduction or pre purchase returns reduction is quite new. It’s not that they actively know it’s something to look for, but yeah, it’s changing. We have a waitlist on our side with brands signing up on a weekly basis right now. So we see that they’re starting to realize it, then they’re starting to really find us as well.
Brett
And then what are you doing on your end to evangelize this category to make sure that customers know that this is even an option that exists.
Oscar Rundqvist
We’re trying to engage wherever this is discussed, trying to encourage this to be discussed even more. Hopefully, and probably there will come some regulation soon. So we’re trying to really talk about it and spread information and inform both shoppers and brands about the fact that this is a huge environmental issue right now. And then, yeah, we’re trying to also, while we present and educate about the problem, we also present our solution to it. So yeah, that’s our approach right now.
Brett
Makes sense. And then from a marketing perspective at a high level, what does the marketing strategy look like today?
Oscar Rundqvist
I think right now we haven’t really applied that many active marketing strategy. We founded a company a year ago. Currently I think it’s more word of mouth brands find us through LinkedIn, I guess, Instagram. They’ve started to sign up to our waitlist in a very nice way. So I think, yeah, it’s something, maybe it’s the word of mouth then, but that’s not, I guess, the marketing strategy that has been started from us. But yeah, later on I guess it will be more marketing that we will apply when we’re there.
Brett
As you start thinking about that marketing plan, what do you think are going to be some of the channels and tactics that you’re going to explore?
Oscar Rundqvist
I think one thing that we discussed and already started to explore in our messaging when we post things is that we want to make it cool to shop in a responsible way and we want to make it rewarding. And maybe we could explore kind of gamification aspects where responsible shopping, low return rates is rewarded by, let’s say, early access to new collections or invitations to cool fashion events, etcetera. So I think that kind of connection to connecting the responsible way of shopping, to also getting rewarded and to make it cool and fun. And imagine if the kids could compare the return rates and the ones with low return rates would encourage in a way. So maybe that’s something for your wife as well.
Oscar Rundqvist
Too soon she will be maybe this encouraged if she has a high return rate and then encouraged to start to change her behavior because she will be rewarded with a low return rate.
Brett
Makes sense. Now if we just look at eComID, obviously eComID is very broad. Theres so many different buckets of companies or segments of companies in that market. Which one are you prioritizing? And then what was that process like to really identify that segment of the market?
Oscar Rundqvist
Yep. Currently we are prioritizing fashion, e commerce in general, there is a return rate on average on 20% fiscal selling in physical stores its around like eight or 10%. But within fashion on the eComID its like between 30% to 50%. So we have really targeted that segment as a first step and it’s also because most of myself and most of the team comes from the fashion segment. So that’s what we know best and can really adjust the solution to that segment specifically. So yeah, and for example, as an example, 54% of all dresses that was bought online in Europe last year were returned. So yeah, this return rates are just very alarming right now.
Brett
And then in terms of geographies, are you just focused on Sweden currently? Are you just all of Europe? How are you thinking about where you focus, attention, energy and resources?
Oscar Rundqvist
Yeah, so we’re based in Sweden. We have an international team, one of our co-founders from Venezuela, one from Spain, but we’re based in Sweden, but we’re live globally. So yeah, global first has been an approach that we applied day one. So yeah, the solution has been applied everywhere.
Brett
Does the solution have to change as you go from different companies or different countries? Sorry? Like in the UK, is it different from Sweden? Is the US different from the UK?
Oscar Rundqvist
In a way, we see that we need to do local adjustments. For example, I guess you could call it like shopper readiness to sustainability messages. Swedish customers are very far on those areas where maybe in some other countries the sustainability messages has not been as. Yeah, they’re not used to the same kind of messaging. So yeah, we’re doing local adjustments depending on where we’re live and what the customers there are used to.
Brett
I know previously you were at H and M group where you were leading the digital customer experience. How would you describe the ideal dream digital customer experience today for e commerce brands like, what is that ideal experience look like?
Oscar Rundqvist
I think the ideal customer experience is that it’s 100% customized to you. Customers attention span has gone down drastically and especially among young shoppers. So I think the personalization is customers are having more and more expectations on the products and sizes, etcetera, that you see are relevant to you. And yes, that’s a niche example here on this, I think imagine a future where we don’t even need to talk about sizes. You can just buy something and then that website knows it’s you Brett, shopping, and the site knows exactly what size you should have and you never need to even select what size. So yes, as an example of those kind of pre selected personalization settings that just makes your life much easier to shop the right things and then you will never need to return anything either.
Brett
What about fundraising? So as I mentioned there in the intro, you’ve raised over 3 million us to date. Of what have you learned about fundraising so far?
Oscar Rundqvist
I learned a lot. I think it’s really fun. I saw it almost as when we founded the company and got the amazing team together that we have in place. I saw that as an extension of our team. I learned that when you are a Founder, you can also do your due diligence on your investors. And I think were also fortunate enough to have multiple term sheets on the table so we could ask questions back. But I think that’s something I learned, that it’s not just you being interviewed and reviewed by your investors. You can also do the same thing back and then make sure that you find investors that really align with your values. And we are working in the vision.
Oscar Rundqvist
So yeah, we really made sure that we found investors who are potential division and had the same kind of values when it comes to anything that has to do with business basically. And on other more personal notes as well, which has made sure that we have a really nice now cap table with investors that we really are happy with.
Brett
If we look ahead to the next twelve months, what’s your top priority or top priorities?
Oscar Rundqvist
I think the top priorities now is to make sure that we continue with our very qualitative brand partnerships. As I mentioned, we have this wait list of brands on our website, but we intentionally right now are not onboarding all brands at the same time. We rather want to have fewer but better and I guess in a way deeper relationships with a few brands we select to onboard. So that’s the priority still a product focus and to also expand the team so that we can take advantage of this momentum we experience currently. So yeah, product focus, brand focus and team focus, I guess.
Brett
Let’s talk about the next three to five years. What is the big picture vision here of what you’re building?
Oscar Rundqvist
The vision winning that I would say, since our idea with e command is that we acknowledge that product returns is not one brand’s problem, it’s an industry wide problem. So there we have a vision of not helping. Yes, the few brands that we are able to help today, but rather help the industry, help each other. So acknowledge it’s an industry wide problem, then we also want to provide an industry wide solution and really tackle this problem into a new kind of era of returns, where online shopping is not what it is today, but rather than at the state where customers are shopping in a responsible way, informative way, informed way, and that it’s fun to keep and you should always shop to keep and kind of bracketing purchases.
Oscar Rundqvist
For example, when you buy multiple sizes of the same product, then you know that you’re going to return something. We want to avoid that kind of behavior, and we also want brands to take responsibility to avoid returns over time.
Brett
Amazing. All right, Oscar, we are up on time, so we’re going to have to wrap before we do. If there’s any founders that are listening in, they want to follow along with your journey. Where should we send them?
Oscar Rundqvist
Currently, we’re prioritizing our LinkedIn page, so, yeah, or our instagram, where we are, I think ecommighty global. So, yeah, LinkedIn or Instagram or, yeah, myself or any of the other team members on LinkedIn. So happy to talk returns with anyone.
Brett
Amazing. Thanks so much. Really appreciate it.
Oscar Rundqvist
Thanks, bro.
Brett
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