Munich Startup: Who are you and what do you do? Please introduce yourselves!
Eik Lämmerhirt: Sebastian Engel-Wolf, Tjark Metzner and I are the founders of Keepoala. Keepoala is the leading loyalty program for reducing returns from online shopping with help from shoppers. As digital returns experts, we find the right leverage for every reason for return to reduce the return rate.
We’re all originally from Thuringia. Tjark and I grew up on the same street, so we’ve basically been friends since kindergarten. Sebastian and Tjark went to the same school. I met Sebastian through Tjark. We’re all 32 years old now, which means our friendship goes quite a way back. As different as our academic backgrounds might be, we always knew: If we ever started a company, then we’d do it together.
Sebastian studied molecular biotechnology at TUM and has been programming since he was 16 years old. Tjark completed his studies in economics at the University of California Santa Barbara, was then one of the first employees at Flixbus and, as a result, played an active role in shaping the growth path of the digital company from four to more than 1000 employees. My name is Eik and, after studying business administration at TU Dresden and Audencia Nantes, I assisted in the establishment of more than 30 deeptech businesses for a company builder.
This year, we started working together from Munich on the Keepoala vision for a more sustainable eCommerce sector.
Every return costs more than 10 euros
Munich Startup: What problem does your startup solve?
Eik Lämmerhirt: We solve the problem of excessive return rates, starting with Germany as the European champion of sending things back. Every order that is sent back generates transportation and handling costs of more than ten euros and pollutes the environment with nearly 1 kg of CO2 per return. According to the colleagues from the returns management research group of the University of Bamberg, the returns problem led to a total of 280 million returned packages in 2018 and costs exceeding 3.4 billion euros in Germany alone.
With a smart incentive program, we would like to reward online shoppers for not sending orders back. The focus here is on closing the intention-behavior gap. This means that the willingness to shop sustainably is there, but the hurdles to doing something positive are still to high, which in turn keeps me from doing what I actually intended. With our app, we’re going to make it as easy as possible for shoppers to be rewarded for their environmental awareness when shopping online and for them to reduce their own carbon footprint. By providing more transparency about the environmental footprint when shopping, we’re providing a longer-term solution for more conscious consumption. If an item is sent back, shoppers can still be rewarded for providing detailed information about why the return was made. The participating online shops, retailers and brands benefit firstly from declining costs thanks to avoided returns as well as return data. Secondly, thanks to the sustainability label from Keepoala, they also benefit from increased customer satisfaction and loyalty.
Munich Startup: But that’s nothing out of the box!
Eik Lämmerhirt: It’s true, there are countless rewards programs. Some of these programs also aim to reward shoppers for avoiding returns. But these are ultimately only isolated solutions from a few brands and shops. The end customer is overwhelmed by different amounts of points and loyalty cards, and doesn’t receive any feedback about the positive impact they can have with the right shopping behavior. At the same time, there are complementary technological solutions that can help avoid returns before an order is made, meaning they put shoppers in a position to order the right product before making the purchase. This includes better product images, camera-based body measurements and customer reviews.
Keepoala is the leading program that puts online shoppers in the center of the eCommerce interaction, without belonging to one specific shop, to avoid returns both before and after an order has been placed. The combination of sustainable impact thanks to the app-based focus on the end customer in connection with a digital B2B returns dashboard for partner companies is innovative and new. For the first time, scientific knowledge about returns will be used to make a positive change in shopping behavior without shop owners having to worry about losing revenue.
Munich Startup: What have been your three biggest challenges so far?
Eik Lämmerhirt: Customer traction is generally the biggest challenge for early stage startups, which is also true for us. Sustainability for eCommerce retailers needs to be more than just lip service. Balancing daily business with new approaches to enhance core business is difficult and requires a clear strategy from both retailers and brands. The shops that think it isn’t possible to reconcile environmental awareness with increased profitability and increased customer satisfaction will most likely lose out in a few years. We’re excited to already be in talks with many forerunners in the industry.
At the moment, environmental protection is one of the most important future-related issues for nearly all Germans. That makes it important in the development of the individual motivational and compensation strategies for our app to highlight real savings potential instead of just engaging in greenwashing.
Before our time together at Keepoala, we all gained many years of experience at other startups and in consultation and customer projects. That means we might have faced some setbacks along our career paths, but they have only accelerated our learning curve as a consequence. We can now use that wealth of experience to push Keepoala forward and do something good.
Keepoala has talks with investors planned for the year ahead
Munich Startup: Where would you like to be in one year, and where in five years?
Eik Lämmerhirt: We’ve already been able to validate and improve our business case with a great deal of extremely positive feedback from customers, retailers and academics in the field of returns research. For the twelve months ahead, customer traction will continue to be the focus of our activities. In this area, we want to talk with as many interested retailers as possible to generate added value early on for the participating shops based on data quality and analysis. This will be the basis for being able to scale the user app for shoppers. For scaling, we plan to announce the first meetings with investors in 2021 and hope to then have some news to report in one year in terms of investors.
In five years, we want to be THE quality label for sustainable consumption in online shopping in Europe. Independent of our entry market of clothing and shoes. That means when players in the eCommerce realm want to efficiently and credibly implement their efforts towards creating a sustainable value chain and reducing their carbon footprint, then we’re the ones to do it with!
Munich Startup: What do you think about Munich as a startup location?
Eik Lämmerhirt: Munich is ideally suited as a location for us in the early business stage, apart from the high cost of living and the operating costs we have already incurred. The university landscape gives us very early access to highly skilled professionals and working students, which has allowed us to already expand our team to seven team members. Moreover, we also benefit from our local network of ex-employers and from strong sparring partners such as Werk1 and its community, Plug & Play, Baystartup and its investor network, and from Munich Startup, of course. As enthusiastic racing cyclists, Munich’s proximity to the mountains is the icing on the cake in terms of location for Sebastian, Tjark and me.
Munich Startup: Risk or security?
Eik Lämmerhirt: High risk – high return (and for once we don’t mean returned orders). Plus a fundamental addition in our case: high impact! We’re aware of how challenging it can be to set your sights on both B2C and B2B. We feel certain that it will only be possible to really leverage the potential of a sustainable eCommerce sector by working together with all market players, which is why we’re positioning ourselves as the all-encompassing returns expert.