In theory, shopping online couldn’t be easier. You tap a few buttons, something shows up at your house days later, and you move on with your life. In practice, though, it isn’t always that easy — especially when you’re shopping for clothes. The fit isn’t right, or the color isn’t what you expected, or it turns out you look ridiculous in corduroy. (And you do.) Sometimes you bother to return the item, killing your lunch hour at the post office. Often, though, you shove it in a corner, or under your bed, and tell yourself you’ll ship it back later. You never do.
We know this about ourselves, and it may be one reason we don’t shop online more. That on-demand retail is our future seems to be a foregone conclusion, and yet less than 7 percent of all retail sales are e-commerce, according to the Census Bureau. But this week, I saw an app that could meaningfully notch that number upward. Shyp, a year-old logistics startup now operating in San Francisco, New York, and Miami, handles all of your returns — fetching them from your house, packaging them up, and shipping them back to their point of origin — for a flat $5 fee. And as of today, it will even print out the return label for you.
Less than 7 percent of all retail sales are e-commerce
When the San Francisco company launched its business last year, it expected to cater to small-scale merchants (think eBay power sellers) and people who wanted to send gifts without traveling to the post office. Those remain its most popular uses. But over time, more people started using Shyp to return things they bought online but didn’t want to ship back themselves. (America!) Online returns now make up 15 percent of Shyp’s business, and so the company decided to build returns into its product. Shyp Returns is a new tab inside the company’s app, which is available for Android and iOS.
Here’s how it works. You download the app, create an account, tap "add shipment," and select the "returns" tab. If you’ve already printed out a prepaid return label or if the store you shopped at included one in your order, you can just tap that button and summon a courier to your doorstep. If you shopped at one of 12 big retailers Shyp has integrated with to date — including Amazon, Target, Zappos, J. Crew, Nordstrom, Banana Republic, and Rent the Runway — you just tap the retailer and type in your order number. Shyp will print the label for you, come pick up the package, and ship it using whichever service is cheapest.
In other words, instead of letting the $100 pair of jeans that don’t fit languish under your bed forever, you can now get 95 percent of your investment back just by mashing your paw on some glass a few times. And Shyp says they expect this will spur people to shop more. "We see people sending back more and more of these returns," says Kevin Gibbon, Shyp’s co-founder and CEO. "It’s changing the way that they’re shopping online. Instead of going to a mall, now you can try on three or four pairs of shoes to see which ones you like in the comfort of your own home."
Shyp is growing 20 percent a month
Gibbon became obsessed with the shipping industry as an eBay power seller in Vancouver, where he somehow earned six figures importing and exporting $100 dudebro Affliction shirts and other high-margin items out of his garage. Shipping is a huge business in this country — UPS has a market capitalization of $92 billion — and yet there has been little innovation there since FedEx entered the market in the 1970s.
Today, Shyp piggybacks on top of those services; one way it makes money is by charging you the retail cost to ship your package, while it pays a lower bulk rate negotiated with the carriers. But one day Shyp could compete with the FedExes of the world more directly. Gibbon says his vision goes far beyond the occasional e-commerce return or holiday gift in the mail; Shyp is growing 20 percent or more each month, he says, and at that rate he’ll probably soon have a lot of venture capital to get him where he’s going. (It’s raised $12.1 million so far.)
For now, Shyp’s appeal lies primarily in the extreme convenience (I used it successfully to return some review hardware to a big manufacturer) and low price. That $5 fee isn't profitable for Shyp, though, raising the question of how sustainable it is. For now, it's a way to attract new customers. Gibbon says the price will "evolve," which is a startup term meaning "increase." So let’s enjoy it while it lasts — and maybe spruce up your wardrobe while you do.