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Episode 31: Bridging the gap between returns and sustainability: A female founder’s journey

Sippin' & Shippin'
Sippin' & Shippin'
Episode 31: Bridging the gap between returns and sustainability: A female founder’s journey
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Tanya Phipps|January 20th, 2023

Meet Jess Owens, the founder of Greenlist. She takes us on the journey of how she got started, the challenges she’s facing as a female founder driving a new concept to market, and her passion to make online retail returns more sustainable. The Sippin’ & Shippin’ crew is inspired by her vision and tenacity to push through the obstacles as she builds a solid business from the ground up. So, grab your drink of choice, tune-in, it’s Sippin’ & Shippin’ time!

Timestamps:

1:33 Jess and Zack’s story

3:26 The conceptualization of Greenlist

5:05 First steps into entrepreneurship

9:11 The hunt for retail brand partners and investors

14:32 When returns meet sustainability. (Is that a thing?)

17:54 Building your brand with integrity, but how?

19:33 Incentivizing repeat purchases

21:27 Marketing a new brand

24:30 When more verticals make sense

Do customers really want sustainability in logistics banner.

Transcript

Brian Weinstein: Welcome everybody to Sippin’ & Shippin’. I’m your host, Brian Weinstein. We’ll be kicking it here every other Friday, quenching your thirst for an insider’s take to enhance your customer experience. So grab your drink of choice, kick back. It’s Sippin’ & Shippin’ time.

All right, welcome everybody to another episode of Sippin’ & Shippin’. I am your host, Brian Weinstein, and as always, I have the Young MC Post with me to co-host and keep me honest and keep me real. Hey, Caitlin.

Caitlin Postel: Hey, Brian. I like that. I wasn’t sure where you were going to go with it. I’m like young, okay, I’ll take it. MC, I’ll take that as well. It sounded cool. Thank you for the intro. Excited for today’s episode.

Brian Weinstein: I kind of like the Young MC Post.

Caitlin Postel: I know. I caught it. I caught it.

Brian Weinstein: Okay. Okay. Just wanted make sure.

Caitlin Postel: Well played, sir.

Brian Weinstein: All right. We have two guests today from Greenlist. We have Jess Owens and Zack Whitacre. How are you both doing?

Jess Owens: Great.

Zack Whitacre: Good. How are you, Brian?

Brian Weinstein: Awesome. Awesome. So I’d like to just get a little background to start everybody off. And maybe Jess, you can start and then Zack, you can give a little bit of your background as well. But Jess, tell us a little bit about you and where you came from, what your roots are.

Back to “Returns and Sustainability” index

Jess and Zack’s Story

Jess Owens: Yeah, absolutely. So I grew up in Austin, Texas and went to school at Wake Forest in North Carolina and then found my way out to DC. Started working in law firms as a legal assistant and then moved into a more creative space and legal recruiting. Took a break to start a family, and then got back to work. Really missed the working environment. I worked for a small consulting firm, and a big part of my job was I was constantly working with entrepreneurs and we did things ranging from helping people create their brand, name their business, really launch, up to helping people launch franchises like CycleBar and all sorts of different companies. So this really allowed me to work with different people at different stages of their business and learn what entrepreneurship was all about.

Brian Weinstein: Awesome.

Jess Owens: I always wanted to be an entrepreneur. I knew I would do it someday, just didn’t quite know what the right thing was.

Brian Weinstein: Awesome. How about you, Zack?

Zack Whitacre: Sure. My background most recently, I have about a 10-year career so far in e-commerce, mostly in operations, always passionate about sustainability. I was on the sustainability committee at Bonobos, my former employer. And then one day, I’m just kind of scrolling through LinkedIn, the infinite scroll, and then I saw a story on returns and Jess was tagged in the comments. And as somebody who’s working on helping solve this problem, e-commerce returns as writers recent acquisition.com contacted mine there said it’s the armpit of running a 3PL. And so I certainly saw that when I was at Bonobos. And so I reached out to Jess and saw the sort of intersection of returns and sustainability and knew I had to get involved. And so here we are.

Back to “Returns and Sustainability” index

The conceptualization of Greenlist

Brian Weinstein: Awesome. Awesome. So Jess, if we could take a step back because I’m always fascinated by how people… Your background is not returns and sustainability and things like that. So as you’re going through a process, I don’t even know, and we’ve spoken to other guests that we’ve had on the program who’ve said they weren’t even really setting out to found a business and all of a sudden they kind of discovered something. What was the process there? Were you out there searching, doing market gap analysis or was this just something you kind of stumbled across?

Jess Owens: Yeah, that’s a great question. I was actually shopping online at the end of 2019 and I put a jacket in my shopping cart and I was totally obsessed with this jacket, had to have it, but it actually sold out while it was in my cart.

Caitlin Postel: Aw, womp womp.

Jess Owens: I know.

Caitlin Postel: Hate that. I hate that.

Jess Owens: It happens to everyone at least once. So I reached out to the company and I said, “Can you connect me to a return of this jacket?” Because up to 40% of those jackets would get sent back. They couldn’t do this. No company does this, which I thought was a little crazy. So I quit my job and set out to solve my own problem. Built a small team of advisors who were mostly dads from the bus stop. Really everybody I knew got involved. I would see somebody walking towards me and say, “What do you do? How can you help?” And pull them in somewhere.

Back to “Returns and Sustainability” index

First steps into entrepreneurship

Brian Weinstein: So can I ask, what’s the first step? So you recognize that there’s something that’s not being addressed in the market, and is your first step to go find money to help build this? Is this something you’re bootstrapping with some of your own and your hiring programming or marketing or some other sort of analyst to help you take those steps?

Jess Owens: So the first thing I did was a ton of research, a lot of reading about the industry, learned how pollutive it is and just how difficult logistics are. I also did over 100 user surveys to really see if this is something that would even resonate with consumers. So really a lot of just digging in to the topic. And Ashley, who’s a third member of our team, is technical. So she started doing research as to how we would even work this out from a technical perspective. That was really helpful. And then just really digging in with people in the industry and people who worked in tech. Really anybody who would talk to me, I took a meeting with. So doing a lot of research and learning from others.

Brian Weinstein: Then you build that foundation, so what’s your shovel into the ground kind of moment? What’s that first moment where you’re like, “Okay, I think we’re ready to get this going.”?

Jess Owens: Well, one of the first things we did was create a manual version of our product. So that was using surveys and spreadsheets, and we figured out how we could develop the product without building the technology. And I read a ton of books about what’s the best way to build tech and get it out into the world without spending a lot of time and money. So that was really important. I then joined a female entrepreneurship group and it was very fashion focused, or it is. So I reached out to many, many women in the industry, and a handful of them actually own small retail companies. So I was able to partner with them very early on and get a lot of experience that way.

Caitlin Postel: So it sounds like networking and really just tapping into resources is such a huge start to your business, which I love. And props to LinkedIn for actually connecting people and not just showing puppy videos and shouting out people’s kids. To see you guys get connected in that way, I love that. Jess, I love the story of you see this jacket. I know it’s happened to me before. I’m very curious to understand how the brand that you reached out to reacted when you asked for this to be linked up with a return. I would think that they would be kind of salivating. I think in our space we deal with so many merchants who struggle with this issue of returns, but to have a return come back and already have it sold, you would think that they would be rubbing their hands together trying to figure this out or a light bulb goes off. So how was that met? You don’t have to disclose the name of the brand. But I’m just more curious to understand how that conversation went.

Jess Owens: Well, it’s funny because as I reached out to them, the idea was really forming in my head, and so it was a very quick conversation. I basically said, “Can you do this?” They said no. And I dug in a little bit more. Then I wanted to get off the phone immediately because I was like, “Oh no, I don’t want them to steal the idea or do it themselves.” So it was a quick conversation.

Why it's time for retailers to embrace returns culture banner.

Caitlin Postel: The aha moment where you’re rushing them off to start doing that research and just get in, right? “This is the opportunity. This is where I’m going to make my name as an entrepreneur.”

Jess Owens: Exactly, yeah.

Caitlin Postel: Yeah, love that.

Back to “Returns and Sustainability” index

The hunt for retail brand partners and investors

Brian Weinstein: And did you need those first brands though before… I mean, obviously you have to start to bring in new brands or brands at all to get yourself going, get the kind of proof of concept out there to market. Was it difficult to find brands to launch with?

Jess Owens: Yeah, it was very difficult. And the small companies are all female founded sustainable brands. So our missions are very aligned and those were easier to get on board. It took almost a year to find our first big company to join us, and that was very hard. As you mentioned, I don’t have a retail background, so I was knocking on a lot of closed doors for a very long time. We actually did not build the technology until we got a signed contract from them because I didn’t want to take the leap and then try and sell it after. It was really important to me to get that first big yes.

Brian Weinstein: For sure. And then when you get that first big yes, now you actually have to perform, right? Yeah, and get that out there. Does there come a point in time though, or I guess the question really is at what point in time does it become a little bit more difficult to continue without starting to get funding and to continue to scale? Is there a tipping point that you hit?

Jess Owens: I did hit a tipping point. I invested a good amount, my husband and I, and building technology is incredibly expensive, as you would imagine. So we ended up doing a small friends and family raise about a year and a half ago. But I did quickly learn that this was before I had the signed contract, and we really just needed more traction. So I paused, went all in on sales, got the yes, and then immediately started our fundraise again, and we had much more success after we had that first climb on board.

Brian Weinstein: Right. Yeah, I would have to imagine that any investor is really going to look for that sort of proof of concept, make sure everything is what it’s said to be before you get there, before you start to get that real round of funding. And so as you’ve continued to grow over the last year and a half or so, I’m sure there’s been other avenues you’re going out and looking into the market for more investors. How have you found the climate now?

Jess Owens: It’s been very challenging. We were fortunate that we had a very successful, what I call, friends family angels round. We also won an innovation grant from the state of Virginia, so that was phenomenal. But we have met with over 100 small VCs and a lot of angel groups, and we’ve gotten a lot of nos. Women get less than 2% of funding, and we have found that to be very true. Another challenge with our business is that our target demographic are younger women primarily, and a lot of people that we’re pitching don’t fit in that target demographic at all. So it’s a lot harder to get through to them and really explain the value of the concept.

Brian Weinstein: Are there groups out there, VC or private equity that focus on women founded businesses?

Jess Owens: There are. And there are groups that are focused on sustainable solutions. So there’s a lot that are targeted towards companies like ours, but what we have learned is that early stage isn’t actually so early, and it’s just gotten a lot harder to raise money. So it’s been challenging for us. It’s been really hard.

Brian Weinstein: Yeah, and do you think that’s because of the perceived economic headwinds? Or do you think that’s just in general, there’s just more startup companies out there competing for that money?

Jess Owens: I think it’s a little of both, honestly. And in meeting other founders, everyone’s struggling to raise money. So it’s something that we can all relate to, and people just seem to be making less investments in early stage businesses. It’s tough.

Brian Weinstein: Right. No, for sure. And look, I think there’s always going to be ebbs and flows. And we probably came off of, and the investors have probably come off of a period of absolute giddiness where they were throwing money around it was The Roaring Twenties, and now there might be a little bit of like, “Okay, let’s digest a little bit.” But man, I really… And Caitlin and I run into it all the time with the brands and the people and the services that we speak to, there’s still a lot of untapped new businesses out there that are coming up with a lot of really great innovative ideas. So it’d just be interesting, it’s probably a little bit of a storm right now that everybody has to weather, but I think hopefully if all indications are right, this will be a shallow recession and we should be out sometime mid-year. But yeah, because I’m excited to see the next round of innovators in the marketplace.

So you have combined two passions, I think, for a lot of people at Greenlist with returns and sustainability. It’s an interesting concept that you’re sort of proposing as your business prop here. Maybe just tell everybody a little bit about what that is.

Back to “Returns and Sustainability” index

When returns meet sustainability. (Is that a thing?)

Jess Owens: Absolutely. So right now, when you make a return of something you’ve bought online, it goes back to a store, a warehouse or a landfill. Up to 50% of returns go straight to a landfill. So it’s a complicated mess. With Greenlist, that return instead goes directly to another consumer. So we are cutting out the middle steps altogether and taking a peer-to-peer approach to returns.

Brian Weinstein: So it’s an interesting concept. And obviously the sustainability part is that it’s less transportation, it’s less going to landfills, it’s a lot more to that. Tell me a little bit how you’re assuring peer-to-peer that the quality of the returns that you’re getting as the second recipient is really the quality that you would expect coming straight from a facility, D2C or whatever.

Jess Owens: So during our returns process, when someone is actually making the return in the system, they have to qualify that it’s new with tags, in perfect condition. So we’re asking that first person, “What does your return look like?” If there’s anything wrong with it, if it’s damaged or worn, it goes back to the warehouse as it typically would. So that first person has said, “This is good to go.” We then in the next step, ask them to fold it carefully, put it in the mail within three days, and we’ll give them 10% off their next purchase. So really incentivizing people to be good members of our community and then off it goes. And so far, knock on wood, we’ve been really lucky, all the shoppers have done a good job about passing it on to the next person. And a big part of that is because peer-to-peer shopping is huge. Everyone in our target demographic does it all the time. So they’re used to shipping their things off to other people. So we’re just tapping into that model that exists and is growing.

What's next for sustainability and green logistics? banner.

Caitlin Postel: I think that makes a ton of sense. Just changing consumer behavior, and I think it holds true in every facet of retail and D2C, right? We’ve had returns folks on the program before, and Brian speaks about back when returns were they didn’t want you to return, they wanted it to be as hard as a process as possible. And then we fast forward, different platforms where now they’re just making returns frictionless, and now people are bracketing. And bracketing is just a practice of buying multiple sizes of the same product. So now you’re encouraging that overbuying and then returning. So to hit the Gen Zs who are using thredUP, they’re using whatever other marketplaces that there are, Poshmark, Depop. Yeah, this is just in their nature, they see it, the value of sustainability. So I would think that they would buy into the concept pretty willingly.

Brian Weinstein: Caitlin, there’s that word again, by the way, community.

Caitlin Postel: Always. Always. Right.

Back to “Returns and Sustainability” index

Building your brand with integrity, but how?

Brian Weinstein: Yeah, so Jess and Zack, we’ve been talking about this a lot. One of the reoccurring themes for a lot of brands is community. They’re building a community. The ones that excel at customer retention and repeat buying have built a community around it. I think in order for your product here to work, you have to build a community of people that there’s a lot of trust. Do you track, so if someone receives a peer-to-peer product and it comes in and it’s not well cared for, it wasn’t folded, is there a methodology at this time to track the bad actors in that process?

Jess Owens: We are able to do that, yeah. Because we haven’t had a problem yet, we haven’t really started. But we know where every package is coming from. So we could do that.

Brian Weinstein: See, I think to me it encourages good behavior because no one wants to be the one who’s done something and not played nicely with others. And again, it builds that like, “Hey, I’m going to do the right thing.” And it’s almost like a pay it forward concept. Let’s all do the right thing, so when I get my peer-to-peer product that I just ordered, and I’m getting it from a peer that it’s going to come in nicely and well represented of the brand. And honestly, the peer that’s sent it to me, they’re well represented too if they do the right thing.

Jess Owens: Right. Exactly.

Back to “Returns and Sustainability” index

Incentivizing repeat purchases

Caitlin Postel: And if there’s a layer of some incentive in there, I think that’s helpful as well. If you get some type of discount. You’re sending it back anyway, and as the person who would get that return, whether it went to the warehouse or it came straight to you, let’s just reduce the carbon footprint, just send it directly to that next person. Are you in incentivizing, or are the retailers responsible that you’re working with for making it appealing to the folks that you’re targeting?

Jess Owens: The retailers are giving the discount on the next purchase.

Caitlin Postel: Okay, nice. Yeah, so that’s-

Brian Weinstein: I honestly don’t care where the discount comes from. As long as I’m getting a discount somewhere.

Caitlin Postel: Yeah, it’s helpful. It’s helpful. And then you’ll buy more stuff and return that as well.

Brian Weinstein: No, but it makes so much sense because the cost of returning the product, just in terms of the shipping costs, the refurbishing costs, and the restocking costs at the warehouse, the discount makes sense.

Jess Owens: It does.

Caitlin Postel: I think it goes back to about the community, right? Because then there’s brands like, I know recently, I think at the end of last year, Zara stopped giving out free returns, and now you’re making people think twice about what they’re ordering. But maybe I want to order those two sizes, and if I can help someone else out and they really wanted that jacket I tried on, I kept the one I wanted to. So I think it’s just a different approach, but if there’s something like, “What’s in it for me?”, unfortunately, I think a lot of people go into that mindset, then maybe that shifts the consumer behavior and kind of leans it towards this type of model.

Jess Owens: And returns are getting a lot of negative publicity. So it’s really highlighting the problem for consumers, and a lot of people had no idea. So people are becoming more conscious about it and wanting to do something different. I can’t make returns anymore. I just hold on to them, give them to somebody else, because I know how damaging they are.

Back to “Returns and Sustainability” index

Marketing a new brand

Brian Weinstein: And so just shifting gears back towards your business and launching and things like that, you’re now out there, you’ve got a couple of brands, you’re in fundraising mode too. But how are you marketing yourself? How are you getting out there in front of the retail brands to really get the message out there of what your offering is? What’s your approach there?

Jess Owens: We have attended events. We have done digital marketing for some time, and we are constantly networking, so just really meeting new people every week and asking directly for their contacts. And that’s been really effective in setting up new meetings. We’ve been fortunate, we’ve been able to get in front of many, many companies, a lot of the largest retailers in the world, so it’s been just really relying on the people around us and putting it out there in other ways.

Brian Weinstein: Yeah, that’s awesome. When you’re building from the ground up and you’re really building from scratch, it takes the efforts to land the first few, be successful with those first few and continue to build off of them. Word of mouth is obviously really crucial in that space as well.

Jess Owens: Yeah, we also last year did a program called New York Fashion Tech Lab last spring and summer. That is a program that major companies like Macy’s, Calvin Klein, Kate Spade participate, and they pick five founders every year of people working on innovative solutions. And we are one of those companies. And we spent three months with these very big organizations going through our product, learning about what we would need to do to be enterprise ready. That was a phenomenal opportunity to develop deep contacts within those groups, and we’re still talking to a couple of them. So that was a fantastic sales opportunity for us, and it allowed us to really get in front of a lot more people.

Brian Weinstein: Yeah, that’s awesome. And so what is the target consumer for this? Is there a demographic that really fits to this model?

Jess Owens: Millennial and Gen Z groups, and then also people who are outdoorsy and sustainable in nature and want to do something different. We’re really targeting companies that work with those consumers. And I think really the younger folks are the ones driving sustainability initiatives. But then that said, couple of the companies we’ve talked to want to appeal to those younger shoppers, so they could almost use this as an acquisition tool, and that’s what our current company that we’re working with is doing as well.

Back to “Returns and Sustainability” index

When more verticals make sense

Brian Weinstein: Yeah, I think you’re right. Not that us old folk aren’t into sustainability, but I do think it really resonates a lot with the younger millennials and the Gen Zs especially. So obviously you want to target brands that are targeting that demographic. Is there a particular vertical that works best with a product? Is it fashion? Is it apparel? Is it health and beauty? What’s really your key vertical there?

Jess Owens: We have been very focused on apparel. We also have a pilot running in the Bay Area with furniture because we’ve been approached by a couple furniture companies. As you can imagine, returning a piece of furniture is tremendously expensive, and a lot of companies say, “Just keep it.” So that is one area that we’re really starting to explore and build our model to see how it works with furniture as well. But I’ve heard light fixtures, sports equipment, fishing gear, just everything under the sun. “Oh, you should do this with this category and this category.” So there’s really a lot of opportunity in the different categories that we could handle.

Brian Weinstein: Right, right. That’s interesting.

Caitlin Postel: Yeah, I guess apparel makes sense because it’s the easiest to ship, right? I was surprised to hear you say furniture as a second. But it makes a ton of sense. How do you even start there as far as transportation is concerned? Who are your customers now, it’s just namely apparel?

Jess Owens: That’s correct.

Caitlin Postel: Okay.

Brian Weinstein: Yeah, apparel always makes the most sense in the return space because you’re averaging anywhere from 18 to 35% return rate. So it’s probably generating the most returns, apparel, footwear, and accessories, it’s generating the most returns of all the verticals.

Caitlin Postel: For sure.

Brian Weinstein: Interesting. Caitlin, anything we missed that we forgot to ask?

Caitlin Postel: No, I think we covered it pretty good, Brian.

Brian Weinstein: Excellent. All right. Well, Jess and Zack, appreciate having you both on, I think this was great. And Jess, your insight on this, being an entrepreneur and the trials and tribulations of it, to me is always fascinating when an entrepreneur like yourself identifies an area and just how it evolves from there is always very interesting. And I know when you get this thing successfully out there into the world, people will look back and say, ‘”Eh, it was easy for Jess.” And we all know it’s not.

Jess Owens: Not at all.

Brian Weinstein: No, but you know what? It’ll be worth it. I think what you’re doing here is fantastic, and in a way that could be transformative to the returns industry. So congrats on getting this a thing up and running.

Jess Owens: Thank you so much. I appreciate that.

Brian Weinstein: All right, everybody, thank you very much. Caitlin, take us out.

Caitlin Postel: Sure. Thank you, Jess. Thank you, Zack. Thank you all of our listeners for tuning in. Check us out on your favorite podcast platform. Thanks guys.

Jess Owens: Thank you.

Brian Weinstein: Thank you.

Do customers really want sustainability in logistics banner.

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