The retail world has been cleverly avoiding the icy grip of the grim reaper for several years now. As consumers continue to shift their whims and wallets with just a few clicks, the reports of retail’s demise and potential rebirth keep coming.
After spending a week with some of the leading executives of retail companies from around the globe, I can tell you that these tremors in the retail world have inspired some truly creative thinking among the industry’s top leaders.
During my time at the recent Women in Retail Leadership Summit, I was astounded by the ingenious campaign strategies, technology platforms and new business models that are sprouting up from the troubled soil of traditional retail. I met women who built entire brands around the idea of online crowd-sourced beauty tips, women who dug in to uncover unmet needs in the fashion landscape and built companies to address them, and women who are re-imagining in-store models to create a truly hybrid experience between digital customization and in-person service.
I was truly inspired by these leaders who have forged new paths through unfamiliar territory in their industries to identify, attract and convert customers in stores and online, which made it all the more intimidating for me to stand up on the stage and tell them all that they were missing something.
I wasn’t there to warn of instant death by store closure, but instead to sound the alarm on a problem that will steadily drain the value of their brands during a time when they need to be building and sustaining loyalty. Their biggest threat was hiding in a marketing blind spot — the e-commerce delivery experience.
The at-home unboxing experience is the “Last Moment of Truth” for any brand. This is the moment when a consumer is dedicating personal, hands-on time to interact with a brand — time that used to be spent in a dressing room or browsing an in-store display. Now, that moment of truth is happening in kitchens, living rooms and bedrooms filled with scattered boxes, piles of packaging material and return labels.
All the work that marketing leaders are embarking on to identify, attract and convert customers online is being put at risk when they turn over the actual job of delighting the customer to their counterparts in fulfillment operations, people whose job depends on creating the lowest possible cost to ship for each item, not on creating the most memorable customer experience.
This dangerous disconnect between brand marketing and fulfillment operations poses a real risk to customer retention.
According to consumer surveys conducted by Harris Poll and Kantar Retail, more than half of all e-commerce customers say they’ve had a poor at-home delivery experience. Among those that have had these negative experiences, 38 percent percent say a bad at-home experience will cause them to consider shopping with a competitor next time. A full three-quarters of e-commerce customers say they’re likely to share bad experiences with friends and family, and 23 percent will take their gripes to social media. Some brands may say they’ve already made investments and improvements in their e-commerce delivery strategies, but only 11 percent of consumers think that brands and retailers are doing a good job with the delivery experience.
That was the cold, hard truth I delivered to a room full of retail innovators. Consumers believe that 89 percent of brands and retailers are failing to follow through with promises when packages arrive on customers’ doorsteps.
But there’s good news in that shocking statistic, because where there’s failure, there’s also significant whitespace opportunity for brands that want to differentiate by doing it right.
The retailers that bridge the gap between consumer marketing and fulfillment can give the grim reaper the slip and breathe new life into brands (and their bottom lines). A whopping 87 percent of consumers say that a positive delivery experience makes them more likely to shop with the same retailer again. And more than a third of consumers identify as being “packaging aware” users who care about the ease, appearance, tangible unboxing experience, and disposal of packaging materials. These shoppers tend to spend as much as two times more on their repeat purchase visits when given a premium packaging experience the first time around.
The Last Moment of Truth doesn’t have to be another death knell for brands and retailers. However, if left unaddressed, it will certainly speed up a brand’s potential demise. The time to address the gap between in-store and online marketing strategy and your fulfillment operation strategy is now.
The brands and retailers that respond to this threat quickly and creatively will be able to rest easy knowing that customer acquisition and retention strategies aren’t being undermined by the unboxing experience taking place inside the home.
Jennifer Grabenstetter is the executive director of global marketing at Sealed Air, a provider of innovative food and product packaging solutions.