For the first time ever, the ecommerce market has stalled in growth in 2022. As both direct to consumer (D2C) and corporate brands grow out of the COVID ecommerce boom, they are looking for new ways to engage customers and increase brand loyalty in an increasingly competitive marketplace. If the convenience of online shopping is no longer enough to lure customers in, brands must instead turn to customer experience to grow, writes Anton Eder, founder and COO of parcelLab.
Young D2C brands have saturated the marketplace in recent years, and many have taken notes from corporate brands that have spent years honing their brand image. In a study comparing corporate to D2C, we see how these two different types of brands stack up to each other as they each tackle returns processing, sustainability and post-purchase customer experience.
How do brands stack up with their shipping practices?
Consumers are valuing transparency more as a primary quality in a positive shopping experience, and as the reliance on delivery goods increases, keeping customers in the loop can drastically improve a brand’s reputation. To examine shipping as a primary means of comparison, D2C brands are taking the lead when it comes to shipping transparency and shipment notifications. While 72% of D2C brands studied automatically offered shipping updates that were displayed in the customer’s account. This contrasts with 28% of corporate brands, showing a gap in communication that could potentially lead to long-term customer loss.
The types of notifications also varied between D2C and corporate brands. D2C brands are more transparent, sharing order confirmation and shipping confirmation status updates. D2C brands were more forthcoming with timely “order coming soon” (56%) and “order coming today” (38%) updates, giving customers a better sense of transit times even after product has passed from fulfilment to last mile. Corporate brands fall behind with 36% and 28%, respectively.
Even with some discrepancy in post-purchase notifications, what is also important here is the ability for all brands to control the timeliness and presentation of the shipping notifications that they do share. Especially in the growing field of last mile visibility, customers receive a wide range of notifications from the brand to the logistics provider, leaving a sense of confusion on the true nature of their shipping status. Relying on the carrier to provide shipping communication not only causes complications in the case of multiple orders, but it is a missed opportunity for D2C and corporate brands to redirect their customers back to their website. Customers want transparency, but they are also seeking a streamlined process – a process that prioritizes brand familiarity and minimizes multiple site visits.
Returns handling are a hot topic for all brands
Returns are often thought of as the end of a customer relationship, but proper returns management can encourage customers to engage further with the brand. Our research found that while return deadlines are relatively similar between D2C and corporate brands, both leave the customer in the dark when navigating potential returns – a process that must be optimised. Empowering customers to engage in returns by providing precise returns instructions lets customers feel in charge of their experience with the brand, an empowerment that leads to favourable brand perception.
A key finding in examining returns policies is that 82% of corporate brands offer returns free of charge for customers. D2C brands lag behind with just 48% of brands offering this convenience. Making returns more difficult for customers, whether it is cost prohibition or difficulty in return logistics, leaves them high and dry when trying to return a product that may be the wrong size, ill-fitting or even just different than expected. Part of the post-purchase experience is equipping customers with the tools they need to find the products they need. Making returns accessible for all customers is key in establishing further brand engagement and a more positive shopping experience overall.
Sustainability is now a consistent means of comparison
The rise of ecommerce has ushered in a new examination of how brands are making good on their environmental sustainability promises. Consumers are increasingly interested in supporting brands that can deliver on a range of sustainability goals and will make buying decisions accordingly. While cardboard still reigns as the top material brands are using for shipping, D2C brands fare slightly better with 60% of brands studied utilising sustainable packaging.
In an increasingly visual world, brands are also eager to brand their packaging and create visual experiences for buyers as they unbox products, often posting new purchases to social media. D2C brands have taken to this shift, with 70% of products shipped in branded packages versus just 36% for corporate brands. While package branding can lead to a better post-purchase experience, it does not take away the environmental responsibility brands are expected to undertake.
Many retailers struggle with packaging, especially retailers with large product ranges and customizability options. In many scenarios, shipping packages are often much larger than what the product requires, leaving room for optimization in how companies pack and ship their products. What is promising, however, is the industry trend of using little to no plastic in shipping packages across both D2C and corporate brands, leading to a commitment to less waste where possible. As the market shifts social responsibility to brands, we should expect to see further pushes in bold sustainability goals to meet both new industry standards and growing customer desire for responsible consumerism.
Where can brands optimise?
Overall, a full examination of the post-purchase experience shows the gaps in customer service that brands must work to bridge to improve customer experience and brand loyalty. There is a growing number of post-purchase solutions for brands to hone their experience and keep customers coming back for years to come. The key lies in full transparency and brand continuity across the entire post-purchase experience. The consumer base is only speeding up, navigating multiple orders and returns from their favorite brands on a regular basis, making it imperative for brands to streamline the process from a customer’s return to their next purchase.
D2C and corporate brands must improve how they handle returns and streamline the customer experience with clear empowerment tools like a returns portal and clear instructions on how to get the product they want or receive a refund. The sooner customers know they can trust their return to be processed, the sooner they are ready to shop again. It is imperative for brands to close the gaps in the post-purchase ecosystem and empower customers through transparency.
Anton Eder, founder and COO of parcelLab