Greener = Profitable
Why do we do this?
Magic has one north star, and that is to reduce km's/miles travelled in reverse logistics a quite unnecessary one trillion dollar industry, which is entirely avoidable. (by default if we stop this, we stop items going to landfill)
Yet, the truth is that it is not as things look today, this problem of returns isn't going to stop anytime soon - this needless reverse of the forward consumption by consumers can be controlled, if at all possible stopped. Magic brings a first of its kind solution to the market, and shows it is possible to in tangent improve margins, whilst improving emissions.
At Magic, sustainability isn't an additional expense; it's a strategic investment. Pursuing sustainability often comes with a price tag, whether a simple click on the offset emissions button or a significant investment in solar panels and electric vehicles, and the yield is long. While the intention to be more sustainable is widespread, the behaviour often needs to catch up due to associated costs. We must bridge the attitude-behaviour gap to shift towards a more sustainable world truly. We believe in showcasing solutions that seamlessly integrate into daily operations, becoming second nature without the burden of effort or cost.
This colossal returns problem can't spiral out of control any further; consider this alarming fact: 50% of items sold by retailer Zalando are returned, even this behaviour from a company making $11b per annum, and they haven't solved the problem, let alone the likes of Amazon, making it easier to return than ever. The simple fact is that these two companies, have executed their reverse logistics flawlessly, drivers, warehousing, people, all in the right place at the right time.
We believe all brands need this infrastructure in place.
Ok how does Magic solve this?
Let's break down our solution into three parts, all can use independent of each other or an unbeatable solutions for stopping returns from going back to the warehouse or landfills — when used in unison.
Our insights dashboard provides recommendations, finds inefficient supply chain routes, and suggests small changes that accumulate into a profitable power play.
First: Supply prediction
Our machine learning model uses existing collaborative cross retailer data, alongside 40+ data points, to predict if a return will happen, and when, we harness customer intent, and find patterns of returns and orders that originate from the same country to identify overlaps of supply and demand.
Second: Demand channels
After knowing when a return will happen, we provide local solutions, from automatically listing returns before they happen on local recommerce channels, to sourcing partners and customers looking to acquire those returned products — when they are in the country.
Last: Local infrastructure
A local network can be activated within our dashboard, to handle reverse supply for quality control, and inspection, across 14 different countries, with ease stored and shipping from warehousing alongside brands such as Calvin Klein and Tommy Hilfiger.
The challenge lies in educating and building solutions. Most businesses face a daunting challenge because they need a starting point, and the perceived switching costs are too significant. Retailers grapple with vast amounts of operational data, aiming to build an efficient business, optimizing supply chains, expand into territories, reduce return rates, and enhance customer experiences, all while navigating regulatory requirements like EU ESPR.
Shrinking emissions, landfilling, and waste.
So what are the challenges?
These results energize those in operational and sustainability roles and can resonate with CFOs, CEOs, and decision-makers. Yet we want it to be a clear win-win, we understand that retailers are "for-profit" entities, and sustainability needs to speak the language of profitability.
At Magic, we break the status quo of "sustainability software"
We are one of the only solutions to immediately save money the day of switching with reduced shipping fees coming from shorter shipping routes.
The simple truth is that logistics, in any form, is a challenge, you need to be on time, run smoothly and that's why we work with the best. We acknowledge the act of logistics isn't inherently planet-friendly.
We understand the harm, but our commitment is clear: cutting down on Scope 1, 2, or 3 emissions. While we can't control the entire supply chain, we individually vet and ensure every partner is carbon-neutral. Though imperfect, our solution is certainly less harmful to the planet in every way, we're not here greenwashing our messaging, if you'd rarther do something better for the planet then do not produce fashion items, but we'll be here to clean up the mess where we can.
So, no item will end up in landfills or obscure "donation" destinations (which we all know goes to Africa or Asia — the motherlands of our founders).
The founders pledge
1. Give product returns a new life by being resold to another local buyer.
2. Ensure returns never have a long-haul cross-border shipment or flight.
3. Ensure every logistic partner is carbon-neutral and ship item locally by road or rail.
Let's make the profitable choice the sustainable choice and close that gap.
Atul and Leroy - 19 Feb 2024