The race to acquire customers and build brand awareness has produced a revenue windfall for traditional and online companies. However, I would like to suggest that one of the best branding opportunities resides with an unsexy, innocent byproduct of online commerce – e-fulfillment.
Many e-fulfillment discussions focus on the essential topics of efficiency, load balancing, zone skipping and order tracking. While these operational issues ensure that the right product gets to the right person at the right time, and are critical to the success of any online retailer, these topics are less relevant to the marketing or sales executive who is focussed on building brand equity to acquire and retain customers.
For an online retailer to create long-term brand equity, the communication and branding opportunities can be broken into three types: media advertising, the online experience and the fulfillment experience.
Mass traditional and online media advertising represents a good opportunity to build brand awareness in the hopes of ultimately acquiring customers. Using media to target a selected audience increases the effectiveness and generally improves conversion rates. Unless you have an unlimited ad budget, however, there is a limited ability to build a sustainable brand through mass advertising. For online media, the most successful ads offer giveaways and price discounts, which are not in the best long-term interests of the brand.
As for the online experience, once a customer is acquired and is engaging with your site, the true branding opportunity begins. Unlike passive traditional media, interactive media puts the consumer in control. This is a shift in power that amplifies the potential payoff and risks. One bad online experience has an immense impact on the way a customer perceives your brand. On the other hand, if you provide a positive experience, he can become a highly loyal customer. You may even earn a coveted entry in his bookmark.
Online retailers have the unique ability to extend the interaction with their customers by creating a memorable and distinct fulfillment experience. The best online retailers have been doing this for a while. I received my new Dell laptop in a box that was so well designed and packaged, it instantly communicated a high level of quality and workmanship. The box accomplished this in both form and function because the last thing Dell needs is a computer damaged in transit.
If we assume an online purchaser had a great experience buying a product online, certain factors can build a memorable fulfillment experience for the consumer.
Factors contributing to the experience include anything that can influence sight, touch and even smell, as well as factors relating to convenience.
These include packaging, ease of opening, security, personalization, delivery timeliness and accuracy. If you are a branded vendor of perfumes, include a spray and sample of your newest line. Next, you can follow with a phone call on higher margin items to check that everything went smoothly and collect feedback for continuous improvement.
How do we figure out what is best for our customers? Start by breaking down the fulfillment experience from the consumer perspective and building it back up piece by piece. If you have an existing brick-and-mortar presence, look at successful and relevant customer service features to incorporate into the online fulfillment experience. If your retail return rates are as high as 30 percent, for example, the inclusion of postage-paid return slips might render your online operation unprofitable. Then again, if your return rates are that high, you have a different set of problems and should start by looking at who is buying your products.
Lastly, the traditional retail model provides many hints for enhancing the fulfillment experience. When consumers shop, for example, they like to buy a variety of products from multiple vendors. The fact that they are from different sources is invisible to the consumer. One of the inherent ways the retailer adds value is with the physical aggregation of product.
The e-fulfillment equivalent to this in-store experience is a multivendor basket of goods shipped directly to the consumer – a single box with lower shipping costs and the convenience of a single delivery time. However, most online retailers today point customers to different affiliates for each product.
The result is very confusing and inconvenient: multiple shipments from multiple suppliers – with boxes arriving weeks apart, higher shipping costs, and delayed notification of stock outages. These models generate poor fulfillment experiences. Online retailers that operate using these models should re-examine the way they interact with their customers.
With the costs of acquiring a customer increasing all the time, online retailers need to spend considerable time and effort thinking through their business processes in order to retain the customers they already have. Creating a memorable and distinctive fulfillment experience is a big piece of that customer retention effort. Coincidentally, the fact that Amazon.com reports fulfillment in its marketing costs might be prophetic after all. Fulfillment can be the ultimate branding opportunity.