Please welcome Loop, a seamless returns platform both brands and customers love
Meet Loop, the latest addition to Lerer Hippeau’s portfolio.
HQ: Columbus, OH
Cofounders: Jonathan Poma and Corbett Morgan
The problem: Last year, total merchandise returns accounted for $369 billion in lost sales for retailers across the U.S. And, of the returns made annually, at least 30% of those purchases were made online. As the number of online shoppers continues to rise, at an estimated 224 million in 2019, returns remain a point of tension in the relationship between a brand and its customers. Not only do companies lose a sale with every return, but they also see fewer than one in three customers come back to make a second purchase — which can be more costly considering the rising price tag on customer acquisition.
Loop’s solution: Working with some of today’s most popular consumer brands, including Allbirds, Chubbies, and Brooklinen, Loop focuses on creating “love after purchase” by strengthening the customer-brand relationship. Here’s how: the e-commerce SaaS platform provides an end-to-end, customer-facing platform for online returns and exchanges, while offering sellers a means for converting refunds to exchanges. It asks, Would you like a different size? Or, a new item? Store credit or a regular refund? As a result, Loop aims to limit returns while offering customers more options from the start. To date, Loop’s Returns product has processed more than two million returns for 200 of its own customers.
Origin story: Loop was born in 2017 as a better solution for the returns and exchanges process on Shopify. Led by a team with deep consumer insight and e-commerce DNA, Jonathan Poma (founder of Rocket Code) and Corbett Morgan (former Head of Product at Klarna), Loop seeks to increase customer lifetime value while offering a much better experience for buyers.
Why we’re betting on it: As direct-to-consumer retail becomes more and more competitive, brands are increasingly looking for ways to retain and grow revenue while keeping their customers. Over the years, we’ve closely studied this shift in the market and we’ve seen it play out first-hand for many consumer companies within our portfolio. Jonathan felt the same pain point while working with brands through Rocket Code. His intimate understanding of this problem for retailers has informed Loop’s strategy. Added to Corbett’s product experience, Loop not only provides a seamless, elegant experience for the end-user, but also aligns the user’s interest with that of the retailer.
Our take: Consumers are increasingly seeking optionality and convenience online. Yet, that’s driving an unsustainable rate of return for e-commerce brands. As the number of online shoppers grows, and businesses try to keep up with customer acquisition costs and increase retention, an opportunity arises to deploy software solutions that address the end-to-end experience for customers and brands. We believe that Loop aligns the best interests of both stakeholders — getting users products they want, while helping retailers retain those hard-earned customers and reduce overhead.
Further reading: “Loop Returns picks up $10 million in Series A led by FirstMark Capital” via TechCrunch
Learn about careers at Loop Returns.
