Online retailers have a powerful tool for marketing to existing customers, potentially increasing sales, average order size, and profit. That tool is the shipping box merchants send to customers with almost any order.
There are at least two things to consider when you think about in-box ecommerce marketing.
The first of these is that returning customers (those coming back for a second purchase) and repeat customers (those who have made three or more purchases) can be very valuable. In an often cited report, The ROI from Marketing to Existing Online Customers, Adobe points out that more than 40 percent of U.S. online retail sales come from returning or repeat shoppers who collectively represent just 8 percent of total ecommerce site traffic.
Returning and repeat customers are also likely to spend more on each order. Adobe estimated that a returning shopper will spend three times as much as a new customer on a per order basis, and a repeat customer will spend about five times as much as a new customer, again on a per order basis.
Marketing to existing customers can increase total sales, average order size, and, assuming that your items are properly priced, profit.
A second consideration is that sending an order to a customer might be thought of as a form of direct mail marketing.
For example, a multi-channel retailer in the Northwest recently examined the cost of offering free shipping on some orders. Separately, the retailer was sending direct mail offers and coupon offers via Valpak, the marketing firm. The direct mail had been very effective. But it costs upwards of $1 per delivery, depending on printing, postage, and how it was sent.
An opportunity arose when that retailer began to think about the box carrying a customer’s order as another direct mail marketing vehicle. The retailer could justify relatively thinner margins with free shipping since it was generating repeat sales often with a larger average order size.
The only real question then was what to put in the box.
Put Coupons in the Box
Eastbay, an athletic apparel retailer based in Wausau, Wisconsin, includes a broad, percentage-off coupon offer in the box with the orders it sends to customers. In a recent example, a returning Eastbay customer could get 15-percent off of a $75.00 or larger order with the coupon code included in the box.
The offer works because it is broad. Customers can use it to purchase whatever they like from Eastbay. A narrow offer, say for 20 percent off of a Nike Air Force One shoe, probably would not perform as well since not every Eastbay customer would be interested.
The offer is also trackable. Eastbay can look at how often the coupon code is used and calculate a lift in sales. This allows the company to optimize in-box marketing offers to get the most out of each new coupon.
Put Free Merchandise in the Box
Design by Humans, which is a community-driven shirt retailer, has been known to include free merchandise in its boxes. A new customer who buys two or three tees from Design By Humans might find an extra shirt featuring the Design By Humans’ smiley face logo.
The unexpected gift can have the effect of endearing Design By Humans to new customers and encouraging additional sales.
Put a Treat in the Box
Similar to adding free merchandise, some retailers will put a treat like chocolate, lollipops, or even gift cards to popular restaurants or coffee shops in the box along with an order.
The shopper is rewarded for making an online purchase, and the merchant is hoping that the treat will effectively train the customer to return and make more purchases.
The treat in the box approach can also create opportunities for collaboration with other retailers. As an example, a candy retailer might be willing to supply samples and a coupon to a clothing retailer for in-box inclusion.
Put a Review Request in the Box
There is a significant amount of evidence indicating that shoppers read product reviews and value the peer-generated product information those reviews contain.
Encouraging reviews has at least two benefits: It brings a customer back to your site, and it creates content that could help future shoppers make a buying decision.
Include a simple, no-strings-attached request for a product review, and be prepared to track the number of reviews the in-box request garners. Be willing to change the way you ask for reviews too, tweaking one thing or another to maximize the response rate.
One word of caution, don’t offer to give shoppers anything in return for a review. Some folks look at that practice as buying positive reviews, and it can have a negative impact.
Put a Catalog in the Box
Many retailers understand the value of on-site merchandising, offering related products, up-selling to name brands, or even cross selling to a similar item that may, for one reason or another, have a larger margin.
Adding a catalog or even a single-sheet product flyer to the box extends merchandising beyond the site and exposes customers to related or additional products.
As with several of the other in-box tactics, it is fairly easy to measure lift from the catalog or flyer.