Here, Tobias Buxhoidt, founder & CEO, parcelLab, explains why the checkout customer experience is so important for direct-to-consumer brands, and how engaging directly with shoppers during this frequently neglected part of the customer journey can drive loyalty, awareness and sales.
The rush to direct-to-consumer trading is on. As well as selling their wares through retailers, more and more brands are bypassing this traditional channel and engaging directly with shoppers online, with 99% of consumer brands looking to implement a DTC strategy.
This growing trend has been fuelled by the rise in social media channels and apps that allow sales to be made directly from them in one click, enabling consumers to go straight from post to purchase. Cutting out retailers in this way obviously increases brands’ profit margins. Just as importantly in today’s increasingly competitive global market, it provides the opportunity to strike up a direct conversation with shoppers to strengthen customer relationships and drive loyalty.
However, it also throws up an interesting challenge: how do brands engage with customers directly in this DTC process? Shoppers have used search engines, social channels and apps to find the products they want, so DTC brands don’t get the chance to control and craft the buying journey like retailers do, because in many cases there simply isn’t one. This means the customer experience beyond the checkout – delivery, returns, etc – becomes crucial. The quality of the shipping process reflects directly on the brand itself. What’s more, it presents the only opportunity for direct engagement.
Focused very much on making the buying journey as smooth as possible for customers, post-purchase is not an area where online retailers perform particularly well. Doing so would undoubtably improve the overall customer experience, but many still primarily use the pre-checkout phase for direct shopper engagement. In fact, only 11 of the UK’s largest online retailers communicate directly with their customers during shipping, according to the UK E-commerce Shipping Study 2019, with only four personalising messages. The remaining 89 either leave this communication to their delivery company or the customer receives no updates at all.
So where do the opportunities for direct engagement lie post-purchase? Well, first of all brands need to take control of communications. Leave the logistics companies to do what they do best and manage post-purchase messaging in house. This means that every update, from order and dispatch notification, through delivery status, to final thank you on receipt of goods can be clearly branded and written in the appropriate voice, reinforcing brand values and awareness.
Handling post-purchase communication directly also enables brands to deal with any delivery problems more quickly and keep customers firmly in the loop, preempting complaints and reducing disappointment and dissatisfaction – two key sales killers. This all helps to build the customer conversation.
However, brands can go one step further, and use the post-purchase phase as a new and highly effective marketing channel. Shipping update messages, whether email or text, achieve 70-80% opening rates. This makes them ideal for increasing sales and driving loyalty by including information about new offers and discount vouchers alongside status updates. It’s also possible to inspire repeat purchases by suggesting complementary products to those being delivered. Those brands and retailers currently using these techniques have seen 70% of customers returning to their websites during shipping and, more importantly, 0.5-1% of these are making another purchase immediately – that’s one in 100-200 returning customers.
Many online retailers are missing out on this opportunity to increase customer engagement and drive sales. With far less of a customer journey to fall back on, DTC brands need to make sure they don’t.