Loop Partners With Happy Returns A Win For Both Sides
It sure looks to me like Loop has consolidated the Shopify returns market over the past few years. The whole business started when Affirm acquired Returnly in 2021, and then shuttered it in 2023 — telling all its customers to move over to Loop which greatly accelerated the company’s growth.
How has Loop consolidated the Shopify returns market?
This looks like another deal where the dominant player on one side, Loop, makes a smart partnership with the dominant player on the other side, Happy Returns, and both sides can benefit and the two avoid competition.
What are the details of the partnership between Happy Returns and Loop?
Loop customers have the option to access Happy Returns' 10,000 drop-off locations where a box is not required, which is frankly how most shoppers want to do returns. It's much better to inspect and understand what to do with a return at the point the consumer hands it to you, rather than have them ship it back.
Happy Returns customers now have a preferred path to integrate with Shopify and serve buyers who are a part of that ecosystem.
Even those who work for other platforms will acknowledge Shopify as the fastest growing platform, so Happy Returns teaming up with the largest returns provider on that platform is good for them as well—particularly as Shopify starts to have more conversations up-market.
Is this a knockout blow for the returns market?
While there are several smaller players, it sure looks to me like in the Shopify integration side, Loop has outlasted not only Returnly but now Happy Returns as the primary returns integrator for Shopify. There is competition, but they are much smaller. And now the focus seems to be up-market since Happy Returns is about Enterprise customers, as part of UPS.
What's next for Loop?
At its core, Loop has always been about returns and also not about returns. There is an entire class of supply chain-related companies that never touch a box. So what then?
Loop has been about something very different—driving cash efficiency in a merchant's business by turning an opportunity where cash could have exited the building, and exchanging that for inventory.
Loop helps merchants be more efficient with their precious cash and inventory turns. Making a customer happier during their purchase experience—making it more likely they will purchase again, also cash-benefiting—while at the same time improving a merchant's efficiency.
How will Loop and other growth-oriented SaaS companies evolve?
My partner and colleague Nick Kaplan has discussed on the Watson Weekend about the world having entered the Age of Efficiency—in particular with regards to cash. In other words, the CFO has slid into your DMs.
Going forward, there are other customer experiences Loop could transform to help improve a merchant's cash flow, and this is the direction I expect Loop and other growth-oriented SaaS companies to head in.
Congrats to Jonathan Poma and the entire Loop, as well as the Happy Returns team on this.
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