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Master the Secret Art of Increasing CLV Through Personal and Proficient Order Fulfillment

Mar 8th, 2017

Note: This is a guest blog post by our fulfillment partners at Ships-A-Lot.

Owners of eCommerce businesses typically have a professional background that falls into one of a few categories: most frequently, front-end web development or online marketing.

The ability to apparate a product efficiently and effectively to a customer's doorstep in a way that exceeds customers' already sky-high shipping expectations is a skill that's rarely claimed upon entrance to eCommerce.

In this post, we:

  • Lay out the evidence for our claim, making our pitch: fulfillment experience has a definite impact on future revenues. Excellent fulfillment boosts your brand power and boring or poor fulfillment can sink it.
  • Distill the fulfillment experience into what it really is: an advertisement for your business.
  • Discuss the two methods that major eCommerce players are implementing to take advantage of fulfillment as a marketing channel.

The Pitch

How can fulfillment quality boost CLV?

  1. Match brand voice and packaging philosophy
  2. Each package is a first step towards your customer’s next purchase
  3. Premium packaging is highly shareable

1. Let your packaging speak for your brand

Every contact with your customer is an opportunity to build on your brand. Constructing the most scalable and extensible process for this will result in a great interest rate in this compounding category.

Amazon is the perennial example of a packaging philosophy that communicates efficiency and effectiveness. The boxes are branded and typically have a clear focus on protecting the consumer’s purchase, connecting the two in the mind of the customer.

Our friends at ShipsALot pursue a similar philosophy with their packaging process, demonstrated in the picture below.

The clean, high-quality packaging sends the message that care has been taken with the package. Neat placement of all labels signals attention to detail. Opening the package: the customer finds another layer of protection, a note customized for each client, a well-presented order receipt, and carefully placed bubble wrap.

This shipping philosophy communicates that the core values of the client line up with what their customer values most: receiving their well-preserved product in an expedient and personal fashion!

Of course, there is another direction to go with packaging philosophy: one can include both flair and function. The monthly box companies are basically synonymous with personality-infused packaging. Pictured below we have an example from Trunk Club. The packaging echoes the statement of their brand identity. Taken from their site:

"We combine top brands, expert service, and unparalleled convenience to deliver a highly personalized experience that helps you look your best."

2. Improved brand visibility through socially shareable fulfillment experiences

Entire eCommerce clothing brands are now being built with their fulfillment experience front-and-center in marketing presentation. Customers share on three dimensions: novelty, quality, and speed. The unboxing YouTube category is representative of this fact. Search Twitter for "fast shipping" and you'll see the following result:

This search is always packed with tons of organic tweets from happy customers sharing their positive experience on Twitter. This echoes the idea that consumer expectations about shipping speed are becoming more and more demanding.

A study by Dotcom Distribution found that 40% of consumers were likely to share photographs of unique or premium packaging. The millions of hours of unboxing videos on YouTube serves as pretty strong evidence to this. People apparently love unboxing so much that they’ll vicariously do it: the channel UnboxTherapy has over 7 million subscribers and 1,100 videos right now.

Distillation

Yes, all this general hand-waving sounds great; what is the real lesson here?

Fulfillment is so much more than sending products to customers: it is an integral part of the marketing mix.

This is the real thesis here. When you see it, you can't unsee it!

To reiterate: every contact with your customer makes an impression, it communicates something about what your company is about.

What does a boring package with disheveled contents say about your company? They convey those properties to your now boring & disorganized brand!

Whenever a customer places an order, the clock starts ticking. For a domestic customer in the United States, you have at most 5 days. You have several less if the name of the shipping method chosen implied speedy delivery.

The pressure is on, but you've got all the tools to execute! Below is a roadmap to providing a fulfillment experience that conveys:

  • Attention to detail
  • Personal touch
  • Expedience
  • Accuracy

Now that we are familiar with the core concept, we can talk about the tools for execution...

The Methods

The key properties of any fulfillment solution are:

  • Extensibility: the ability to extend your solution to new use cases and environments (new products, one-off promotions, management of multiple brands)
  • Scalability: the ability to maintain a cost-effective solution as your sales volume grows. If you're working with us, this is definitely a (high-quality) concern to have.

Reasonable solutions break down to two broad categories which we'll spend the rest of this article discussing:

In-house fulfillment solutions

Using Shopify out-of-the-box to fulfill customer orders is a solution that's neither extensible nor scalable. Simply put, it's not recommended. Here are the broad strokes:

  • Shopify's basic shipping methods bake in order batching. This promotes errors and increases the time it takes to process each order by a significant amount.
  • Customization, especially when it comes to customer requests, is time-consuming to handle during this shipping process. For example: If all first-time customers are supposed to receive a free sample item, your shipping employees will have to be trained to and spend time looking at the customer history.
  • Shipping costs are not managed well: Shopify does not have a native label-cost optimizer and this too will fall to comparatively expensive and error-prone training.

There are innumerable options available to streamline in-house fulfillment. Feature lists range from simple label optimizers with order management at solutions like ShipStation to highly robust warehouse management packages like ShipHero.

ShipHero gets a special nod from us for its strong features in order customization and well balanced obsession with accuracy and speed. Once connected to your Shopify store, it will import your product catalog and orders. Its highly automated inventory management tools can email you when stock runs low or even send purchase orders to your manufacturer, intelligently requesting the quantity you need.

As orders are placed on your store, they are transmitted instantly to your order queue in ShipHero; where orders are ranked by urgency. These orders are best processed via an iPad, with each order telling the shipper where they can find the item. The order is validated via a photograph or a barcode scan, the software verifies the correct quantity was picked, and customizations are communicated to the shipper.

Once the order has been correctly retrieved, the shipper receives an order receipt for the customer and is given the best label for the customer's choice in shipping. Check out an example of the iPad interface below:

ShipHero can integrate with multiple eCommerce stores simultaneously and has the capability to connect with numerous sales channels in addition to Shopify. Its system and its price both scale well with order volume, adding sufficient value on the low end to justify its price tag and bringing sufficient performance on the high end to do the same.

Implementing a platform like ShipHero will allow you to effortlessly improve CLVs and boost your brand's reputation. If, however, your brand is more than a mom-and-pop storefront, then there is always...

Outsourced fulfillment

The benefits of outsourcing fulfillment are manifold, though typically the best returns are seen in stores pushing 500+ orders per month. These benefits are, in no particular order:

  • Fixed costs become variable costs
  • Benefit from economies of scale beyond your current reach
  • Add a business partner with millions to billions of orders worth of experience in great eCommerce fulfillment.

You should accept nothing less than excellence in all three of these points from any prospective fulfillment partner. If you are involved in high-level eCommerce, you've likely heard the first two points reiterated again and again.

Outsourcing fulfillment allows you to temper your eCommerce enterprise against periodic or seasonal variations in volume: your bottom-line in low-volume periods will improve significantly. The same is true of higher-volume periods, due to the economies of scale that a reputable fulfillment center will make available to you. Your shipment label costs should be going down by a good 10-20%, reducing the bottom-line impact of free shipping.

The most important, and most frequently overlooked, benefit that every fulfillment partner should provide is their ability to boost your CLV through the quality of their services and consultation.

Fulfillment centers have long-standing relationships with packaging vendors, a huge network of valuable contacts in eCommerce, and know what quality fulfillment looks like.

If you’d like to chat about packaging or fulfillment reach out to our experienced fulfillment partners at Ships-A-Lot.

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