Maria Pahuja has a basket in her house where she drops items she needs to return, often stuff that's been purchased online. Once it gets full, she makes the drive to the post office or the store to recoup her money or exchange the items for the right ones. Many times, the bags and boxes accumulate over days and weeks in her car. Some may never make it and end up as donations to thrift stores and nonprofits.
Pahuja discovered a solution for this familiar and frustrating consumer cycle at the 1717 Innovation Center, where she is a mentor for Startup Virginia. Here, she was paired with Sarah Abubaker who had just launched a new business, ReRunner. Pahuja became one of her first customers.
"The online marketplace has created a venue where people are encouraged to buy more," Abubaker says. "Places like Amazon have figured out how to get stuff to your door easily, but not how to get it back."
ReRunner fills a surprisingly large gap in an e-commerce driven society: the return process. The web and mobile service charges consumers $10 to return or donate items they no longer want. There are additional fees for multiple stores and large donations.
"The biggest challenge is creating something that doesn't exist yet," Abubaker says. "It's hard to explain what a return logistics company is and explain the value to people and retailers who haven't had exposure to such a service. Once they use it, they understand."
Abubaker launched the service in late 2017, the web app in August 2018, and will launch the mobile app in September. Nearly 200 registered users have taken advantage of the ReRunner service already. According to her mentors, the idea has potential to quickly grow to a national level.
"One big retailer like Nordstrom can take it national," says John Kemper, a business consultant and mentor to Abubaker who regularly works with technology-based startups.
The ReRunner app takes care of a problem not only for consumers, but major retailers. Companies like Nordstrom often take a salesperson off of the floor to help manage a return, Kemper says. This reduces sales. When the store finally receives the returned merchandise, it's likely on sale, which means the company earns a smaller profit on the item. ReRunner quickly turns products back over to the retailer to put back on the shelf, and as a result returns lost time and profits.
The need for streamlined return processes will only grow. In 2014, consumers returned $283 billion worth of purchases, according to the National Retail Federation. By 2017, the return rate has increased to $400 billion annually.
Abubaker plans to scale the business to Charlottesville and Williamsburg via agreements with retailers in those areas. Her vision includes using Lyft drivers already out on the road to pick up returns and opening a central ReRunner facility to sort products for returns and donations.
"I think she has to grow quickly in order to have stores see the value and garner large partnerships that will cement her in the retail world and allow for stores to lean toward using ReRunner rather than investing in developing their own similar returns service," Pahuja says.
Richmond is the right place to springboard the business, Kemper says, adding that [the city] is getting "a regional as well as national reputation for entrepreneurship."
Major universities and an energetic community of millennials interested in starting their own businesses are part of the reason. But leaders are harder to come by.
"The world is full of people with vision and concepts," he says. "What makes companies and startups successful is the ability to implement their plans. Sarah has the determination, ability to execute and the persistence." S
Learn about ReRunner at myrerunner.com.