Hello everyone! Thank you for joining us this morning, afternoon, or evening, depending on where you’re joining us from.
With that being said, let’s go ahead and get started! For those whom I haven’t met before, I am Michael Peach and I lead Product Marketing here at Lob. I’m really excited today to be joined by Phil Akhzar, the Founder and CEO of Arka.
Today we are going over a few different topics. We’re going to spend a little bit of time digging into the ecommerce landscape. As al who are online for this webinar know, ecommerce and retail can be a very competitive and challenging business.
We’ll spend a little bit of time discussing the importance of differentiation and how ecommerce companies can take action to stand out to their competitors. We will share some best practices about branding, as well as personalizing your customer experiences, and some practical examples that you can hopefully take home and use today.
As I said earlier, we’ll take some time at the end of the broadcast for any of your questions. As you go along, anything that you want clarity on or if you have any questions, make sure to drop those into the Q&A widget.
Lob and Arka
Before we dig into all of that, I want to start with just a little bit of background about both companies represented today, Lob and Arka. I’ll talk very briefly about Lob. For those of you who are not familiar with us, we are a software company that provides a number of solutions for retail and ecommerce companies:
- One is an address verification service that allows companies to check and correct address information prior to sending any shipments or mailers to customers to ensure that the address that has been provided is a correct and deliverable location.
- The second service we provide is an automated direct mail service. It allows companies to send targeted direct mail communications to their customers, really in the same way they connect to their customers over email.
Both solutions are delivered in APIs which allows companies to fully integrate these capabilities within their ecommerce platforms, CRM, emails, or marketing automation.
Now let me hand over to Phil--first off, welcome! Thank you so much for joining us. Tell us a little bit about Arka.
Phil Akhzar: Absolutely! Thanks for having me, guys. First of all, to everyone attending, I appreciate you coming in to listen to what we have to say.
Arka is a platform for businesses to source packaging online. If you ship physical product, chances are you’re not slapping a label on and tossing it in the mail. It’s going to go in some sort of package. With Arka, we allow you to select and design packaging with just a few clicks with as few as ten boxes that you can get fully branded to reflect your company’s design. You can check out our custom folding cartons, shipper boxes and retail boxes, that enhance brand image!
When you look at the ecommerce landscape here [slide 5], you’ll see that Amazon is the dominant player. You also have the usual suspects of ebay and Walmart. Your storefront, however, on the other side, will be the 1.2 million companies that are set aside from what you would see in the typical ecommerce landscape. How you want to differentiate yourself, we can get into shortly.
Companies that can’t differentiate will get lost [slide 6]. Only 30% of millennials say that they feel loyal to specific brands. Four years is the average lifespan of a small to mid-sized retailer. We’re essentially working on an economy that is less so on the broadscale and more so on the personalized for each person who is actually purchasing a product. Therefore, you’re going to have to break away from all the noise to be able to have your company, your brand, your business shine amongst all the other big players out there.
There’s two ways to differentiate: service and personalization.
- Service: to curate experiences that provide delight at unexpected moments in the customer journey.
What does that mean? It doesn’t necessarily mean that you’re always answering the phone or responding to emails in a timely manner. It’s also creating something different that can allow your customers to experience something that reminds them of what it is like to work with your company.
80% of consumers grow to love a brand over time - requiring 3 or more purchases to create that loyalty. Then it is up to you to create that retention, since that is the most important thing about growth for your business.
- Personalization: leveraging data to tailor experiences to customer preferences and expectations. Again, 80% of consumers prefer companies that personalize experiences. Nobody wants to just go in and buy the same thing that anyone else can get anymore, when they can just subscribe to a business that truly creates something for them.
Michael Peach: Thanks for that! Know what it takes to differentiate and this idea of experiences and personalization, that generally begs the next question: how do I get there? There are a couple of important things you want to think through as part of your strategy:
- First and foremost, and probably the most critical, is the need for data. Any attempt to create a high quality and personalized customer interaction is going to require you at some level to put customer data to work.
I think the good news is for most of the folks online, is your probably have most of the information that you need. Think about your storefront--Weebly, Shopify, or some other ecommerce platform--your probably got a bunch of transactional demographic data about your customers in place in those systems. You know who they are, you know what types of things they purchased, you know how frequently they purchased. This is the type of information that you want to pull in and fully leverage in the types of interactions that you build.
- Secondly, you need to think through where you’re having those interactions. Most ecommerce companies are somewhat naturally digitally focused. Your transactions are all digital, probably a lot of your customer acquisition is digital, and frankly, a lot of your customer communications are digital, and probably pretty specifically grounded in the realm of email.
There’s nothing wrong with communicating with your customers digitally, but even if you’re a pure ecommerce company who doesn’t actually have a retail presence or location, that doesn’t mean you can’t activate off-line channels and create engagement for your customers. You think about the way you do marketing and order fulfillment; there’s a lot opportunities to extend these interactions into the physical world to engage customers at home or work or in places that are different from digital engagement.
- Lastly, let’s not underestimate the impact of branding. Your brand is more than just the product that you sell, it is more than just the appearance of your storefront. It’s really the cumulative total of all the interactions you have with your customers across the customer journey. Really effective and differentiated ecommerce companies have a very clear sense of what their brand promise should be and they carefully align that promise with the rest of their target customers. What that means is their thoughtful about how the brand shows up in all phases of the customer journey.
What does it look like on the front end, when I’m doing customer acquisition? What does it look like when customers are engaged in my storefront? What does it look like when I fill an order? And what does it look like when I’m driving those follow up campaigns to complete the repeat purchases that Phil was talking about earlier?
Interestingly enough, when we look at data and knowing that there is lots of data we can use to leverage to optimize the customer experience… there’s a certain amount of basic data that sometimes gets lost. Certainly, in the ecommerce world, one of those basic but very critical pieces of data is address data. Just a couple of quick notes on this:
- Undeliverable and lost mail costs $20 billion per year. The scary thing about that is that almost all of that is wrapped up in very simple address errors.
Probably everyone dialing in has customers entering address information online. Generally 20% of that will contain mistakes. People do not enter address information all the time; they’re often in a hurry and in check out mistype something. Those errors add up! It does not take more for an address to go from correct to being incorrect to being utterly undeliverable.
For those of you who do business internationally, this challenge is compounded by the different formatting and language requirements that the addresses are written in. That makes it easier to compound the problem and can add additional challenges.
- Yes, there are dollars involved in poor address data, but it’s not just about shipping costs or extra shipping costs. There’s also the impact on the customer experience, as well. It’s potentially a really significant impact!
94% of consumers will blame the retailer for a poor delivery experience. The important part of this is what even if the poor delivery experience is the customer’s fault (i.e. they entered an address incorrectly or did not double check the order before confirming it), it doesn’t matter. They will still cast blame on the retailer. Your customer satisfaction suffers even when you are not at fault for anything that goes wrong with the transaction.
Even more challenging is that 70% they won’t come back and purchase again. You really have one opportunity as an ecommerce company with your customers to create that seamless order and fulfillment experience. If you do not deliver on that, that customer is not coming back. As we noted before, you need those multiple interactions. Brand loyalty is driven through repeat purchase. Without repeat purchase, you simply cannot build brand loyalty.
As an ecommerce company and you want to engage customers offline, then you need the right information in order to reach them. You may not think about it, but physical postal mail is really an important channel for customer communications, especially for indecipherable companies that maybe don’t have a physical storefront.
If you don’t have a place to extend that brand experience to the outside world -- mail at home is a great way to do that! Direct mail has been used a lot for customer acquisition, but more and more companies are embracing it as a way to engage customers throughout the customer lifecycle, especially for retention. This is not just for retention campaigns but also promoting advocacy and referral programs. I’ve included a couple of examples direct mail that I have included on the slide here [slide 11].
The other reason is that it can be much more deeply personalized now. You can take that customer preference data -- whether it is product or messaging -- and tailor it to content on the direct mail that you are sending to align closely with your target audience. In the same way, it is possible now to trigger that direct mail based on customer behavior and milestones. In the same way, you probably got a nurture flow set up or a campaign set up to do something if there is a certain interval between purchases for customers or you’re looking to reactivate customers who haven’t been to the storefront in a month or two. In the same way that you can trigger an email, it is now possible to trigger a direct mail as a follow up touch. That is a really great way to get people to engage.
Moving forward, in some ways, bad address data is inevitable. Customers will make mistakes; they will move, buildings even change! It is important to consider the fact that you will always have to do some planning to maintain correct addresses. The best approach that we’ve seen, where companies are very successful at it, come at it in two ways:
- Addressing address data on the front end by making sure at check out time they are doing a quick address validation, checking for typos, making sure they’re entering a valid postal delivery address, and then correcting it at that point as needed.
- Also, they do regular ongoing cleanses; taking customer data, refreshing it, rinsing it, and making it better. This ensures that older data just sitting in your systems is continually getting updated and refreshed for the latest customer information.
What is Branding?
Now I’m going to hand it back to Phil and we’re going to talk a little bit more about branding.
Phil Akhzar: Thank you! Dot Com distribution put together some stats that reflect customer behavior when it comes to purchasing and what that branding packaging means to those consumers.
40% of consumers were just apt to purchase a product that came in nice packaging versus the generic packaging that their products came in. We’ve all been guilty of this, we’re easily susceptible to judging a book by its cover. When it comes to buying something and you have two identical products - one came in a nice package and if they’re relatively priced the same, they just went after something more premium. A lot of that has to do with the next stat--
68% of consumers perceived the product as upscale because the package was premium. The package was premium, the packaging was upscale, and so the product gave off that same characteristic. This then convinced that buyer to want to get that product. If you get something like a Rolex in a plain brown box, you might be suspicious of it. On the flip side, there’s a lot of drop shippers and online merchants out there that might have a fairly decent product that anyone could replicate through sourcing high volume through Alibaba, then getting a good marketing campaign together, put it in a nice package and sell it. That’s because branding and packaging had a lot to do with that.
Next, 61% of consumers feel a bout of excitement when it came to receiving the package; again, this is something we’ve all been exposed to. At Arka we call this the “doorstep experience.” You come home and either in your lobby or at your doorstep -- wherever your mail is -- you get that sense of excitement because you see that box! Whether its that Amazon box that everyone can recognize or the outside branding of that other business you are working with. That all ties back to that billboard which is your box that works so hard for you and represents your brand.
44% said that the product was worth the cost because of the nice package it arrived in. This is an interesting one because it mitigates buyers remorse. When they purchased this product they were more likely to say “It was worth it” because the branding and packaging experience was a memorable one.
With that, it is all about leaving a lasting impression. Packaging is a simple and easy investment. It’s the first physical interaction of your store that the customer has; it’s almost like a physical form of a UI and UX experience that someone receives when interacting with you and your brand. It’s also a great tool to push clients to share their experience. Whenever you see someone tag something or repost something or tweet something on Instagram that they purchased, it’s typically along side the packaging that it came in.
If you want your customers to continue to advocate your business and you want them to have something alongside that product to amplify that brand experience, then make sure you have a nice package that it arrives in, as well. It has a huge affect on retention rates and brand advocacy for that reason. Going back to this being a good investment, in a world where the cost of customer acquisition is going up, again -- retention, retention, retention. This is an easy way to gather that and it falls under the personalization category when we looked at that slide earlier about personalization.
Now just a quick run through on how easy it is to use our platform.
Step 1: You pick a box type and size, this is actually what it looks like on our site [slide 16]. Then you pick the material and quantity.
Step 2: You design your boxes and then you check out. It is very easy! It’s just as simple as ordering a t-shirt online that you would want to get branded -- same thing goes for our store.
Now I will let you guys talk about a customer of yours.
Michael Peach: Thanks so much! So, who’s doing this well? This is always a great place to close out, to share some examples of ecommerce companies that are branding and differentiating themselves in unique ways. Certainly Smile Direct Club is an awesome example of this. For folks who maybe aren’t familiar with Smile Direct Club, they may be a little under the radar compared to other start up companies, but they are the absolute fastest growing startup companies in the U.S. in the last five years. They’re going with, I think, a multi-million dollar evaluation that they built literally in five years. They are a really incredible company.
What do they do? Well, they are a dentist directed at-home orthodontic service. Basically how it works is: I want to improve my smile and straighten my teeth. I go online and order an impression kit from Smile Direct Club. They’ll send that to me and I’ll take the impression at home. I’ll send it back and one of their on staff orthodontists will, based on my impressions, put together a treatment plan. Then Smile Direct Club will send me a sequence of invisible teeth aligners over a period of time to help straighten my teeth and improve my smile.
They provide a service that traditionally one used to have to get at an orthodontist office, but now can be done and experienced entirely in your home. You’ll notice as I describe their service, there’s a whole bunch of mail touchpoints that happen throughout the customer journey.
Address information, as you can imagine, is very important and valuable to them. They spend a fair amount of effort making sure that addresses are correct--both as customers enter them and also periodically throughout the customer life cycle -- knowing that a treatment could take several years. They make sure they are consistently sending the product -- obviously an expensive product! -- to the right location for that particular customer.
Because, frankly, it’s a somewhat expensive process, it has a decent size of length in their sales cycle. Getting customers over the hump, getting them from being interested to actually converting and subscribing to the treatment plan can take some time. One of the things that they’ve done is examine those key points within the customer journey and look for multiple ways to engage in multiple channels to reach customers and help get them over any roadblocks or challenges in the customer process.
For example, if a customer orders an impression kit but them ultimately does not send back an impression, they will engage that customer over email and a personalized postcard that gets sent to their home reminding them of the outcome of improving their smile. It includes a discount for when they send in the impression kit. They also customize according to the location of the nearest retail store, which gives the customer and in-store opportunity to complete the transaction, as well. Extending their campaign into the at-home channel, as well as email, has helped them to see a 30% lift in conversions. They are a really great example of a company that has built a brand experience that exists online and extends into the home consistently.
I think Burgundy Fox is another example of that.
Phil Akhzar: Absolutely! They describe themselves as an ecommerce brand empowering women to celebrate themselves by curating intimate apparel made for all sizes. They were featured in Forbes this year where the founder, Leslie, was going over how the industry is notoriously lacking in diversity. This sounds like a product that -- going back to personalization -- is not for a certain subset of consumers. It’s supposed to provide a solution for you as the consumer itself.
The best way to do this is not just with their product -- how are they going to reflect that in their brand and in their packaging? They’re able to create beautiful and custom packaging. Each of their products some with -- within the packaging -- a note that is essentially saying “Welcome to the Club!” and “This is curated especially for you, specifically for your size. You don’t have to go into the store and try on a bunch of different sizes to see what works for you.”
Their premium packaging ties in with their premium branding. Customers have been sharing their unboxing experiences which has led to free promotions, obviously. They are all over Instagram and people like to share not only the package, but also the experience that the packaging contributed to, alongside everything that they place in there to celebrate this brand and what the brand represents.
To be able to contribute to that is a wonderful feeling for us as a business, to be able to participate as they continue to grow and shine for their consumers.
With that, I believe we are going to hand it over to some questions…
Michael Peach: The last few minutes here we’re going to go through some questions. We’ve got a couple that have come in. Anyone else who is on the line, is there anything that wasn’t clear, you need some follow up -- now’s a great time to throw them into the Q&A widget. We’ll get to as many of them as we can. I’ll just get started with some of the questions we’ve received so far:
- “What data is most important for personalization?”
I think that’s a fair question. We’ve talked a little bit about some different types of data. I think that one of the most important things to think about, as an ecommerce company, is one of the most valuable pieces of information you have about a customer when it comes to retention. And that is their purchase history.
You know what customers have purchased before, if they’ve made multiple purchases, and even without sophisticated infinity models, you can get a good sense about what kinds of customers you have. You can get a sense of what types of products they have and, even at a very loose level, can develop some segments out of that and tailor the messaging to those segments. At the end of the day, you’re always featuring product, so finding the right product to serve to the right customer is one of the key and easiest ways to do personalization.
Another question that came in, and Phil, I think this one is perfect for you.
- “Does Burgundy Fox put their shipping labels directly on their branded packaging, or do they put the branded packaging inside a standard box that has a shipping label on them?”
Phil Akhzar: Thank you, Amy, for putting in that question. Her company is Perch Bird and Gifts. [Leslie from Burgundy Fox] does put the label on the package itself. With all the packaging that you can buy off of our website, there are shippable boxes. You can designate an area to place the label on the package itself. You don’t need to put that box inside another box. As long as the label is clearly visible, it can be on the bottom. It does not matter, just as long as it is clearly placed on a box as if it was on an unbranded box. The only difference is that this is a branded box that is displaying your design. It does not have any logistical consequence to place the label on that box.
Short answer -- it goes on the branded box. Thank you for asking!
Michael Peach: Cool, thanks for that. Let’s see, another quick question that we can answer in two seconds -- asking for website addresses.
For Lob, it’s Lob.com and for Arka it is Arka.com. Also, if you look at the resources that I talked about at the beginning, you can see those addresses, as well.
We’ve got time here for just a couple more questions as they come in. This is a good one:
- How do you measure, as a small ecommerce company, whether or not you have a good brand experience?
I’ll take a first swipe at this, but I’m also interested in your thoughts as well, Phil.
Obviously, as a smaller company, you do not have access to detailed market research or brand recall types of research. But “brand,” to me, permeates everything that you do.
Often times you’re getting lift off a brand if you’re getting rookie purchases. You’re getting enthusiastic customers who are willing to advocate on your behalf, especially if you do not ask them to. There’s evidence and behavior that shows through in branding, especially if they talk about your site, your packaging, and from then, put it in social channels. They can all be really good indicators.
The other thing I would say to that is: ask! Do not be afraid to talk to your customers and ask them specifically. I’ve had some great success in my career sitting down with customers and asking them to personify how they experience our company or our brand. You can learn great insights as a result of that.
Phil, anything you could add to that?
Phil Akhzar: I’m going to 100% mirror “talk to your users.” That is the most important thing you can do for your business, not just for “do I have a good brand,” but for everything. It’s always a great idea to talk to our users if they are willing to give feedback. Put yourself in their position, if you had a product that you enjoy buying and that business was all ears to hear what you had to say about, hopefully you would be excited to provide that feedback.
Similarly, we do that here at Arka. We talk to businesses that we work with and whether its we’re siloing off our customers and doing some kind of case study on what we can do better, or if it’s just a general survey to get a practical answer on an actionable item you can do tomorrow, maybe in the Checkout process, provide a simple survey on “How did we do? What did you like? What did you not like?”
If you are starting from scratch and you are completely clueless about this -- maybe you’re taking on a business where there are incumbents in that space, to use their process as a benchmark and then what you can do to improve on that -- maybe the experience they provide for their consumers is really generic. But at the same time, it’s a good scaffolding for you to use so that you can either recognize what you shouldn’t be doing, or -- at minimum -- what you should be doing.
Then you can iterate and add from there. To repeat what you said, when it comes to talking to users, I think that’s the most important thing you can do.
Michael Peach: Definitely! I think we’re at time here, actually running a little long. Thank you to everyone who hung on til the Q&A -- good questions! Thank you for the questions. If you asked a question that we didn't quite get to, we will follow up with you offline. Of course we will send around a recording of this presentation, as well.
Again, thank you all for joining today! I really appreciate it and have a great rest of your week!
Phil Akhzar: Thank you so much!
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