Haider Abdo of Returnado: “Making a return is a consumer right”

With consumers’ routines and opportunities to go out and about freely having changed as a result of Coronavirus, the ability to get items delivered to one’s door or, indeed, the least crowded post office in the vicinity has become more important than ever. Allowing customers to select both where to have their orders delivered and […]

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With consumers’ routines and opportunities to go out and about freely having changed as a result of Coronavirus, the ability to get items delivered to one’s door or, indeed, the least crowded post office in the vicinity has become more important than ever. Allowing customers to select both where to have their orders delivered and from where their returns should be picked up has proved to be a key factor in driving growth and capturing market share.

As part of our series about the future of retail, I had the pleasure of interviewing Haider Abdo, CEO and founder of Returnado, the Swedish startup providing a solution to this under-acknowledged flipside of the e-commerce experience — returns. A serial entrepreneur, he has been part of the founding team of a number of startups before going on to start Returnado. Haider also works as a mentor for Founder Institute: the world’s largest pre-seed startup accelerator.

Thank you so much for joining us in this interview series! Before we dive in, our readers would love to learn a bit more about you. Can you tell us a story about what brought you to this specific career path?

Thank you for having me!

For the last couple of years I’ve been involved in both industries and companies either at the forefront of new technology and disruption, or that needed to evolve in order to remain up to date with the innovation happening in their space. Straight out of college I started working for Adobe at a time when the company was shifting from a one-off purchase model to a cloud-based subscription service. I later made the move into publishing where I was part of the team leading the transition from a print magazine business model to one that was completely digital. In parallel, I also founded and co-founded a number of successful companies, ranging from music festivals to a tech-startup providing peer-to-peer marketplaces for the rental of venues and micro-farming.

Working for a few years as a digital specialist at one of the Nordics biggest media agencies where I I had a number of clients in the retails space, I became aware of a key problem in a market that had been growing exponentially and was set to grow even bigger if not addressed soon — retail returns. I noticed that, despite the fact that up to half of all products purchased were then being returned, very little attention had been paid to this part of the retail journey — it was technically under-developed and often comprised of an amalgamation of non-return-optimized systems — making it a horrible experience for the customer.

The data suggested that treating returns as a natural part of the e-commerce journey, and providing customers with a smooth experience that would help them exchange products for something that they actually want, while also automating this process for merchants, would be a valuable service not only for the preservation of retailer’s profits, but also the environment. It was from here that Returnado was born.

Can you share the most interesting story that happened to you since you started your career?

When we were first starting out, we had great ideas, innovative tech solutions, and an incredibly ambitious team (despite there being only 6 of us, 4 of whom were working in Ukraine, while the other two of us were in the Stockholm office). What we lacked, however, were the large-scale clients needed to demonstrate our capabilities to others.

Following several months of courting over email and video calls, we were able to convince a huge brand to trust us to support them with their entire returns process. Initially, it was agreed that we would start with two core markets, to make sure that we could deliver, with a view to this being rolled out globally. There was one catch, they wanted to meet us in person to sign the contracts. As I mentioned, we were a small team and my Stockholm-based colleague and I were located, together with 20 other small entrepreneurial teams and freelancers, in an old store-front that had been remodelled as an open co-working space. While we never lied about our size, we didn’t want to risk our new potential client backing out as a result of our humble settings. The solution? We went to a higher-end coworking downtown, rented the biggest conference room we could find, asked the reception desk to guide our guests directly to our booked room, added the entire team into the meeting through Zoom, and had the entire affair catered. Long story short they signed on the dotted line, and we now handle that customer’s reverse e-commerce operations globally.

Are you working on any new exciting projects now? How do you think that might help people?

Given that we work in the e-commerce space, we have seen so many merchants growing quickly during the outbreak of COVID-19 having enabled new and existing customers to continue shopping, and do so in a way that is responsible. We are delighted to have helped our existing clients continue to grow by working to ensure they are able to provide their customers with the best possible experience throughout all stages of the e-commerce journey, and are also very pleased to have been able to welcome on board a number of new clients this year including Chimi Eyewear, Björn Borg and Wood Wood.

We’re also working on a big project whereby we are overhauling our entire consumer-facing offering with a view to improving transparency so that individuals are given better insights into the status of their returns and are also provided with additional services and options that will help reduce the climate impact of each return.

Which tips would you recommend to your colleagues in your industry to help them to thrive and not “burn out”?

My tip would be to create room to nurture the relationships that make you feel stronger, happier and more engaged. This will not only refuel you for your next challenge but also provide you with alternate perspectives from those outside of your working bubble. To this end, nothing gives me more perspective or fills me with more joy than when my 2-year-old sneaks in front of my camera during a Zoom call and starts singing as loudly as he possibly can.

None of us are able to achieve success without some help along the way. Is there a particular person to whom you are grateful, who helped get you to where you are? Can you share a story?

It would be impossible to credit only one person for getting Returnado to where we are today. The team and I have been supported by great individuals that have comforted us when all seemed lost, challenged us when we got complacent, encouraged us to refine our offering, and grow the team and culture to the best it can possibly be.

There’s Mona Wilcke at Stockholm University, who was the first to not only offer office space and good advice but also was the first to put some skin in the game leading our first financing round. As well as Amanias Abraha from Changers Hub who supported us during our extensive growth phase this last year and also helped foster our first connections with key figures in the European e-commerce scene like Simon Saneback, who eventually helped us sign our first enterprise client.

We owe all our customers, investors and board members a huge thanks for supporting us and trusting our service enough to make it a key pillar within their business.

How have you used your success to bring goodness to the world?

The two core goals of our product strategy are to always offer consumers the best possible returns journey, and to promote sustainable practices in everything we do.

Making a return is a consumer right, protected by law and with more consumers than ever relying on internet shopping, it’s vital this right is not only protected but is also actionable. There’s no reason the returns journey shouldn’t be as customer-centric as the initial shopping experience, and yet this very often is the case.

We are also determined to be part of the solution when it comes to tackling the issues of pollution and negative environmental impact. Through our software we are working to reduce the risk of returned items ending up in landfills, help customers pick more efficient shipping methods, and incentivise both the consumers and merchants to take more sustainable action.

Ok super. Now let’s jump to the main questions of our interview. The Pandemic has changed many aspects of all of our lives. One of them is the fact that so many of us have gotten used to shopping almost exclusively online. Can you share five examples of different ideas that large retail outlets are implementing to adapt to the new realities created by the Pandemic?

Merchants have rightly started looking at online shopping as being more diverse than simply a grid-based webshop that functions on desktop and mobile. We are seeing many retailers experiment with selling on platforms other than their own combining shopping and inspiration, selling items through video, blogs, social media platforms, or tailored marketplaces in response to consumer preference and demand.

As e-commerce sales reach an all-time high, returns have become an even bigger issue to tackle than they were pre-covid and retailers are increasingly seeing the effect getting this wrong will have on their bottom line, as well as the wider damage it can do to customer loyalty. With up to 50% of all items being returned, many are having to play catch up to improve this service.

With consumers’ routines and opportunities to go out and about freely having changed as a result of Coronavirus, the ability to get items delivered to one’s door or, indeed, the least crowded post office in the vicinity has become more important than ever. Allowing customers to select both where to have their orders delivered and from where their returns should be picked up has proved to be a key factor in driving growth and capturing market share.

There are more orders coming in from more customers at all hours of the day, but with no additional allocation of time in which to get it all done. With distribution networks not necessarily prepared the ability to respond accordingly, and in good time, has proven difficult for some having devastating effects on customer experience. Availability and agility become key, and can involve anything from quicker shipments to the adjusting of customer service availability to match consumer activity.

With one of Europe’s biggest retail markets soon to leave the EU, merchants are working around the clock to help consumers receive shipments from overseas and send them back efficiently. As Brexit looms, the focus for many has been on ways to adjust to the new world and ensure their operations remain as undisrupted as possible.

In your opinion, will retail stores or malls continue to exist? How would you articulate the role of physical retail spaces at a time when online commerce platforms like Amazon Prime or Instacart can deliver the same day or the next day?

Things such as item type, the reason for buying a product, and the level of “maturity” in item knowledge will all lead to different shopping preferences. For example, the purchasing decision behind a high engagement product that you rarely shop for and that is expensive, such as a bicycle, is likely going to call for some expert input, require comparison between products and also involve seeing the item in person, in-store. Whereas, when shopping for a low engagement product, that is, something that you buy often and is fairly cheap, e.g. basic groceries, this is more likely to be done online.

We also see that store functions are changing. Even before COVID-19, brands were already using physical retail space as a way to further extend the brand experience through elaborate design, personalized shopping support and loyalty perks, all of which help to increase the perceived value of the brand among its consumer-base. Others were using the space as a way to showcase new or limited edition collections and provide consumers with relevant information on said products whether they could actually be bought in store and taken home the same day or not (e.g. IKEA stores in smaller central locations). We even saw some using physical locations as collection points whereby customers could pick up, return and even refurbish their items in store.

Due to the diverse capabilities of physical retail spaces, and the important role they play in ensuring wide-scale accessibility, I have no doubt that they will continue to exist. What I do think, however, is that both their function and the business models behind them will be adapted to foster a more holistic and interconnected brand experience, whereby KPIs will move beyond the number of sales completed within the physical store, and their presence will be viewed as an integral part of the overall shopping journey.

The so-called “Retail Apocalypse” has been going on for about a decade. While many retailers are struggling, some retailers, like Lululemon, Kroger, and Costco are quite profitable. Can you share a few lessons that other retailers can learn from the success of profitable retailers?

Retailers and merchants that have historically bought into a location relying on foot-traffic in the area but those that have an unclear value offering in relation to those of their competitors will be among the ones who will struggle the most at this time. The same also stands for retailers that don’t adopt a consumer-centric approach.

Interestingly, we’ve seen niche ‘mono-brands’ that initially started online actually begin to invest in physical store locations in order to extend their brand experience, test new collections and create physical meetings. For these brands, the store is not solely seen as a direct sales channel and it is for that reason that they are able to survive and thrive, unlike some of the more traditional retailers. They create a reason for customers to visit their store and experience new levels of the brand promise (think Apple or Glossier). As such, people are inclined to go and learn more about the items they are considering buying and keep tabs on new products.

I would say the key things to get an understanding of are:

  1. Why consumers are currently visiting your store
  2. Why are those who are, in theory, part of your key demographic not be visiting the store
  3. What are the reasons behind you needing a physical location — consider the broader ecosystem of your business e.g. online sales, marketing, brand experience, ambassador programs
  4. Is your store adding value or is it time to move on and get rid or downsize

Amazon is going to exert pressure on all of retail for the foreseeable future. New Direct-To-Consumer companies based in China are emerging that offer prices that are much cheaper than US and European brands. What would you advise to retail companies and e-commerce companies, for them to be successful in the face of such strong competition?

The only way to compete in the current landscape is to provide value and strive to do what you do better than anyone else. But it is vital to consider whether the thing that makes you better actually costs you more to deliver than the value it adds? Are consumer perceptions of your value in line with your own, or are your competitors doing as well or even a better job?

The problem I’ve noticed in speaking with a number of larger traditional retailers is that they’ve been in a very privileged situation for a very long time. They’ve been able to build protective walls around their key assets, which can be anything from cheap access to production, extensive and efficient distribution, or limited competition. However, as the retail landscape changes, these walls are being broken down, and rather than adapting to the times and using the opportunity to figure out their place in the market as well as how they can utilize the same assets available to fast-growing, and usually much smaller businesses, many of these retailers are preoccupied with protecting their legacy business models.

Look at influencer marketing, for example. This was embraced far later by traditional retailers than the fast-growing mono-brands that, despite purely being based online, were able to grow their revenue in just a few years as a result. Of course, the operating costs of a number of these brands is often far cheaper than that of traditional retailers but, regardless, their attention to customer experience, brand promise, and their data-driven nature remains unparalleled. This ability to respond to actual consumer needs, rather than applying hunch-based logic to operational decisions. has been key to their success.

What’s more, these brands know what they do best is producing and selling one specific segment of products to a specific audience and so invest heavily in a consumer-centric experience where being inspired, shopping, returning, and communication with the brand is perfected with the requirements of their customers in mind. This creates loyalty, increases margins and helps in establishing a much-needed tribe of brand ambassadors.

Thank you for all of that. We are nearly done. Here is our final ‘meaty’ question. You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂

One of the biggest challenges I see in the world today is how democracy is treated as an event every four years, when in fact many people’s longstanding issues could be solved by changing this perception.

I’d love to use technology to help increase transparency and promote participation in the democratic process that is ongoing every day — whether that is national, regional, or even hyper-local!

My movement would be to not only promote participation but also supply citizens with data they can easily grasp, in order to take action and objectively evaluate what’s going on.

How can our readers further follow your work?

My thoughts, as well as those of my team, can always be found via Returnado’s LinkedIn page as well as via our website where we share articles, insights and news from the industry.

This was very inspiring. Thank you so much for joining us!

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