It was the dawn of the e-commerce age when Newgistics was founded in 1999 in Austin, Texas with a simple goal: to develop a better process for shoppers to return products they purchased online. At the time, online shopping was still in its infancy and was foreign to most consumers, who only knew the familiarity and ease of in-store purchasing and returns. Returning an item to a store was a straightforward process: Bring the item and the receipt to your closest store location and get a refund or exchange. Consumers knew what to expect. And while many consumers did take advantage of the convenience offered by ordering from a catalog over the phone or by mail, returns always managed to be a hassle since a consumer’s only option was to stand in line at the Post Office in order to send a package back.
As Internet access began to increase in the United States for both home and business use, curiosity in buying and selling goods online began to grow as well. However, simply buying something online was still an unfamiliar process — never mind trying to return the product if it didn’t meet a shopper’s needs or expectations. The online returns process could be quite cumbersome for both the retailer and the consumer, presenting a major roadblock to the growth of the online retail marketplace now referred to as e-commerce.
Established retailers and Internet entrepreneurs trying to fulfill the promise of e-commerce faced many logistical challenges. One of the largest was creating an efficient returns process that would help remove any hesitation consumers had about shopping online. For example, the time it took for a return to travel from the customer’s mailbox to the retailer’s facility could be quite lengthy, and transparency and timely information were often lacking. As a result, consumers were left in limbo on the status of a product they had already bought and paid for, and retailers lacked critical information required for proper business planning and customer service. Newgistics set out to make the process more predictable, reliable and efficient.
Between 2001 and 2003, Newgistics and the United States Postal Service (USPS) worked in partnership to develop a program that would revolutionize the online returns process: the Parcel Return Service. To complement this partnership, Newgistics developed its patented SmartLabel® technology. Newgistics SmartLabels are pre-paid, pre-addressed barcoded labels that consumers can receive embedded on their packing slip or in the box with their order, or — alternatively — print at home. They simply affix the label to their return and drop it in the mail with any postal carrier or at any U.S. Post Office. Retailers also have an option through Newgistics’ suite of retailer-branded Software-as-a-Service applications to collect consumer information about the return, which provides valuable consumer feedback on the reason for return and specific item conditions. The labels link back to the customer’s invoice and provide tracking and sorting information that can be used by parcel carriers, retailers and consumers. The visibility offered by this tracking and sorting information made a cumbersome, unfamiliar process much more predictable. Retailers get unprecedented visibility from the consumer’s doorstep to final returns disposition — including detailed event data, return aggregation data and shipment information — resulting in significant operational savings. This allows retailers to provide advance credit to consumers, opening the door to future purchases sooner. Consumers get valuable visibility via event-driven emails and text messages (Transit Triggers), which reduces the retailer’s costs by lowering the number of returns-related customer service calls. After establishing itself as a reverse postal logistics pioneer and leader, Newgistics then applied the same quality-driven process and technological expertise to outbound delivery. In February 2008, the company became the first shipper compliant with the USPS Electronic Verification System (e-VS), which allows high-volume package mailers and package consolidators to document and pay postage — including special service fees — using electronic manifest files.
In May 2008, Newgistics was awarded the Corporate Business Achievement Award from the USPS for its dedication to innovation, teamwork, communication and customer satisfaction. In 2011 and 2015, Inc. Magazine recognized Newgistics by naming the company to its list of America’s 5,000 fastest-growing private companies.
The USPS and Newgistics again partnered in 2008 to provide free carrier pickup of returns. Retailers leverage Newgistics applications or web services to schedule and manage a pickup, providing even more consumer convenience.
Newgistics’ growth has only continued, as the company has expanded its offerings to include strategic consulting; digital integration, development and support; and order fulfillment. It is now a trusted partner to hundreds of top retail brands, assisting them with capabilities ranging from shipping, returns and fulfillment to e-commerce and more.
With clients including Gilt, Deckers Brands and Fashion Project, Newgistics has truly helped revolutionize e-commerce. In 2015, the company will ship over 80 million parcels with the USPS and will still be the largest user of the Parcel Return Service it helped develop.