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Highlights

How eComID Is Turning Returns Reduction Into a Category

The pandemic created a monster in fashion e-commerce, and most brands are still trying to figure out how to tame it. Between 2019 and 2022, product returns in the US nearly doubled, reaching $800 billion. In a recent episode of Category Visionaries, Oscar Rundqvist, CEO and Co-Founder of eComID, revealed how his company is pioneering a new approach to this crisis by preventing returns before they happen.

The Problem That Demanded a Solution

Oscar’s journey into returns reduction began while leading digital customer experience at H&M. “I realized hands on how extremely broken the product returns space is,” he explains. “And I realized also that the market is really missing some solutions to it.”

The scale of the problem is staggering. In fashion e-commerce specifically, return rates average between 30% to 50%. To put that in perspective: “54% of all dresses that was bought online in Europe last year were returned.”

What makes this crisis particularly complex is how consumer behavior fundamentally shifted during the pandemic. “The physical selling, like, got completely out of the way. So brands needed to compensate with that to really accelerate online selling,” Oscar notes. “And I think that led to a quite irresponsible shopping behavior online, and that had now got stuck.”

The result? A behavior pattern called bracketing, where customers buy the same product in multiple sizes knowing they’ll return what doesn’t fit. This behavior, combined with inconsistent sizing across brands, created a perfect storm. “One medium in one brand could be small in other brands,” Oscar points out, highlighting how brands themselves contribute to the problem.

Pre-Purchase vs. Post-Purchase: Defining a New Category

What Oscar discovered in his market research shaped eComID’s entire positioning strategy. “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,” he explains. “But what we saw is that there are fewer brands and startups that help brands reduce the returns proactively.”

This insight led to the creation of what Oscar calls “pre purchase product returns reduction technology.” Instead of managing returns after they happen, eComID intervenes before the purchase is made, reducing the likelihood that any given shopping journey will end in a return.

The Three-Pronged Approach

eComID’s solution tackles the problem through three distinct mechanisms. First is what Oscar calls “green nudging.” “We in the brands experiences, we nudge the customers and inform them, educate them about the environmental impact of returns,” he explains. The results have been immediate: “We’ve seen studies that just doing this can lead to like a more than 2% decrease in returns and not affecting revenue.”

The second mechanism is incentive-based. “Return policies can change depending on how much return,” Oscar says. “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.”

The third is intelligent guidance. If a customer bought pants in one size two months ago and returned them, then bought another pair in a different size, eComID remembers and recommends the size that worked. It’s personalization applied to the returns problem.

Building Category Awareness When the Category Doesn’t Exist

One of eComID’s biggest challenges is educating the market about a solution category that barely exists. “The category that we’re inventing, kind of returns reduction or pre purchase returns reduction is quite new,” Oscar acknowledges. “It’s not that they actively know it’s something to look for, but yeah, it’s changing.”

The company’s approach to category evangelization is multi-faceted. “We’re trying to engage wherever this is discussed, trying to encourage this to be discussed even more,” Oscar explains. They’re banking on regulation to help drive awareness: “Hopefully, and probably there will come some regulation soon.”

But awareness is building organically. “We have a waitlist on our side with brands signing up on a weekly basis right now,” Oscar notes, suggesting the market is starting to recognize the need even without heavy marketing spend.

Making Responsible Shopping Cool

When it comes to future marketing strategy, Oscar sees an opportunity to transform how consumers think about returns. “We want to make it cool to shop in a responsible way and we want to make it rewarding,” he says. The company is exploring gamification where low return rates lead to early access to new collections or invitations to exclusive fashion events.

“Imagine if the kids could compare the return rates and the ones with low return rates would encourage in a way,” Oscar suggests, painting a picture of a future where low return rates become a social status symbol rather than excessive purchasing power.

The Fundraising Lesson: Do Your Own Due Diligence

Having raised over $3 million, Oscar learned crucial lessons about the fundraising process. “When you are a Founder, you can also do your due diligence on your investors,” he emphasizes. With multiple term sheets on the table, eComID turned the tables. “It’s not just you being interviewed and reviewed by your investors. You can also do the same thing back.”

This approach allowed the company to build what Oscar calls “a really nice now cap table with investors that we really are happy with,” prioritizing alignment on values and vision over simply taking available capital.

Quality Over Volume

Despite having a growing waitlist, eComID is taking a deliberately measured approach to growth. “We intentionally right now are not onboarding all brands at the same time,” Oscar explains. “We rather want to have fewer but better and I guess in a way deeper relationships with a few brands we select to onboard.”

This strategy reflects a deeper understanding that they’re not just building a product, they’re building a category. “We acknowledge that product returns is not one brand’s problem, it’s an industry wide problem,” Oscar says. The vision is to “provide an industry wide solution and really tackle this problem into a new kind of era of returns.”

For Oscar, the end goal is cultural transformation: a future 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.” It’s an ambitious vision that requires not just technology, but a fundamental shift in how both brands and consumers think about online shopping.