Logistics has never played a bigger role in retail than it does now. That isn’t hyperbole, just fact.
What’s the first thing that comes to mind when you think of Amazon? Fast, free shipping? If we need something quickly, we go to Amazon. Can you think of any other retailer whose brand association is its delivery promise?
Amazon has spent years (and billions of dollars) on its delivery and fulfillment network. Its speed and efficiency are made possible by logistics.
Not every retailer can afford to build what Amazon has. Here are three ways you can modernize your logistics to match the brand you’ve spent all that time building—a brand that meets customers’ unprecedented expectations for eCommerce orders.
In this blog, learn about:
- The importance of reinforcing your brand and creating an experience with customized packaging from Arka CEO, Phillip Akhzar
- How a flexible fulfillment and warehousing solution gives retailers and brands more options and better service from FLEXE CEO & Co-founder, Karl Siebrecht
- Combining your brand packaging and fulfillment solution to create a valuable and compelling delivery promise to your customers
Expectations have changed
Twenty years ago, out-of-stocks and empty shelves didn’t look good, but to switch retailers meant getting in your car and driving down the street. Other options weren’t a click away. Shopping trips were limited by geography, which limited our choices as consumers.
Today, we’re inundated with choice. The Internet has created an incredible opportunity for shoppers. We can find the products we need in an instant, and if we’re dissatisfied with price, product availability, or shipping costs and times, we can quickly find another vendor that meets our needs.
For a retailer, there’s a lot that goes into making a valuable eCommerce experience for customers. From your products, to your website and social media presence, to your delivery promise and packaging, it all plays a role.
With competition as close as it is, retailers and brands that want to retain customers—and even delight them—have to consider each stage in the buying cycle and exceed expectations.
Stand out: It’s what's on the outside (and inside) that counts
Emotion plays a huge role in the decision to buy a product. And it’s up to business owners to create a lasting relationship between their product and the end user. If your brand can’t stir up positive feelings within your customers, then there’s nothing to keep them coming back.
One of the most overlooked ways to develop loyalty for your brand is through the first interaction customers have with your product: the packaging it arrives in. That first physical impression sets the tone of your brand.
Let’s start with materials. A study by Smithers Pira shows consumers are becoming more conscious of brands that minimize waste. Researchers found that 68% of consumers decided to buy from companies that used recyclable and environmentally friendly packaging. Ask your manufacturer if they offer 100% recycled corrugate or eco-friendly inks and advertise that you use sustainable materials on your website.
Make sure it’s the right fit. You wouldn’t use the same materials to ship all of your goods, would you? If you sell shoes, t-shirts, and jewelry, then you need different packaging to make sure your products get to your customers’ doorsteps safely.
In fact, nearly 60% of consumers won’t do business with a retailer again if their order arrives damaged, according to the same Smithers Pira study. One of the easiest ways to ensure your products arrive safely is by having the right-sized box. If you’re shipping bowling balls, you may need an oversized box with lots of packaging to keep it from rolling around (literally). If you’re shipping something smaller that’s fragile, then you’ll need smaller boxes that won’t leave too much empty space.
A simple touch of crinkle paper or tissue may do, but keep it consistent with your brand. If you’re eco-friendly and your brand is about simplicity, don’t send a ton of packaging materials that will end up in a landfill.
Now, for the design. Once you’ve determined the three-dimensional requirements for your packaging, you get to the fun part: how to add brand messaging to your packaging. Whether it’s a simple logo on the outside of the box, or it’s a highly curated experience with inside print, branded tissue, and inserts, it’s up to you. Either way, you can use branded packaging to make your customers feel like they’re opening a present every time they shop with you.
One of our favorite examples is the Beautycon BFF Box.
At first glance, you can see a fun and playful design. But before anyone can open the box, it’s protected by a branded belly band.
It’s dead center and draws your eye directly to their brand. And, that’s just what’s on the outside.
Inside, they’ve added their social media accounts into the design and instructions on how to spread the word and share the experience.
And under the insert, they have bundled in some marketing materials with a branded sticker tying all of their products together.
Not everyone has to create the same experience as Beautycon BFF, but packaging is an important aspect of your brand. You deserve to find the packaging solution that is right for you.
Now, it’s about getting your products to your customers’ doorsteps.
Package it up: A fulfillment partner that fits as well as your packaging does
You have products, you have packaging, and now you have to physically get your goods to your customers. Enter fulfillment.
Traditional methods for finding and procuring warehousing and fulfillment services are labor-intensive, time-consuming, and expensive. You can rent your own warehouse, which then comes with procuring the machinery, software, and resources to make that space into a fulfillment center. Or, you can procure services with multiple third-party logistics (3PL) providers in varying locations, and outsource your operations to those companies that rely on different systems.
Whether you rent or go through a traditional 3PL, you’re left with steep fixed costs that leave little-to-no flexibility when the needs of your business and your customers change. And, with the rate of today’s business, the one constant is that things will change.
Know your options. Logistics has never been simple, but eCommerce has destabilized the traditional warehousing model—one that was designed to replenish into a fixed number of retail stores on a relatively predictable schedule.
Today’s demand isn’t reduced to a certain population surrounding a physical store—it’s decentralized. Your customers are everywhere. That means, you need a fulfillment network that’s everywhere they are. Relying on traditional procurement methods isn’t cost-effective.
If your business is growing (and we hope it is), look outside the traditional methods for building a fulfillment network. Across every function of the supply chain (packaging included), things are changing and solutions are becoming more dynamic. Fulfillment is undergoing the same transformation.
As your business grows and evolves, your fulfillment solution will need to evolve as well. You can use a technology platform to tap into a network of warehouse providers—using a single software solution across providers. You can pay as you go, without fixed contracts or long-term leases. You can scale your fulfillment footprint up or down to meet seasonal demand.
Finding the right partner. Whether you determine that renting a warehouse or going through a 3PL or exploring a more dynamic fulfillment solution is right for you, you need a partner you can trust to pick, pack, and help you deliver on your promise.
Look for a solution that is designed to help go from startup to scale. One that is:
- Simple: Has easy-to-use software for managing and monitoring fulfillment orders
- Transparent: Add new locations and optimize performance quickly and easily with trusted warehouse providers and a single software platform
- Scalable: Accelerate growth by adding fulfillment locations in a matter of weeks, not months and shortening delivery time frames in new geographies
Make a promise: Delivery that meets expectations with modern logistics
Your delivery promise is comprised of three main components: price, speed, and presentation. Underpinning all of that are your packaging and the fulfillment solutions. Amazon, though perhaps lacking in presentation, has made its name through free, fast delivery—something on which its customers have come to rely.
Like we said, not every retailer is Amazon—nor should it be. However, those three components are just as important to your customers. Being able to offer, and deliver on, a compelling promise is critical to standing out and retaining customers.
Did you know? In a recent FLEXE study, 56% of retailers said their shoppers abandon carts because their “shipping fees are too high,” but only 44% said “free shipping is essential to business.” Now consider that 74% of consumers say “free shipping” is the most important delivery option.
There is a clear disconnect in what retailers understand to be important and what they can actually achieve with their logistics strategy. And, when we zoom out, it’s true that both fast and free shipping are important to consumers, because we’re human and we like options.
Retailers of every size should have the opportunity to create a compelling delivery promise and brand experience to meet customer expectations. Unfortunately, that is harder to accomplish when you’re stuck using packaging that isn’t right for your products and a fulfillment solution that isn’t right for your business.
You don’t have to be an expert in logistics or have a dedicated department to run your supply chain. Finding solution providers that can help you stand out, package it up, and make good on your delivery promise will help you grow your business and cultivate a loyal customer base. Your brand deserves modern logistics. That way, you can focus on what you do best: creating demand-worthy products.
Phillip Akhzar is a YC and 500 startups alumnus and the founder of Arka. A bay-area native, he moved south to San Luis Obispo to study Industrial Engineering at Cal Poly. Phillip worked at Boeing and Silicon Valley startups like iCracked before starting his own companies.
Karl is a seasoned technology executive, with leadership experience in both startups and large, global corporations. Prior to co-founding FLEXE, Karl was CEO of AdReady, a Seattle-based advertising technology company. He is also a founding Board member of EnergySavvy, a SaaS-based solution for energy efficiency management. Previously, Karl was President of Atlas at aQuantive, before its $6B acquisition by Microsoft, and earlier in his career he was a Manager at Bain & Company in Boston and a Diving Officer in the US Navy.
**Photos courtesy of subscriptionboxramblings.com