[Step by Step] How Can I Wield Shipping To Acquire New Customers And Build Loyalty?

Phillip: [00:00:40] Hello and welcome to Step by Step, a podcast by Future Commerce, presented by Shippo. I'm Phillip.

Brian: [00:00:45] And I'm Brian. And this is Season 6 of Step by Step, presented by Shippo. You're listening to Episode 2 of 5. So if you're just jumping into this series midway through, I suggest you go back and listen from the very beginning.

Phillip: [00:00:59] That's right. We don't miss anything. In this season, we are answering the question, how do you transform shipping from a cost center into a growth center? How do we do that, Brian?

Brian: [00:01:13] I mean, when you're selling candles online, I feel like you just naturally do that. No...

Phillip: [00:01:21] It's just going to happen. It's going to happen naturally.

Brian: [00:01:26] It takes a lot of hard work, a lot of hard work, a lot of smart thinking by our upcoming guests.

Phillip: [00:01:31] And we're going to get right into that in just a second. I'm sitting in this room right now, as you know. You well know. I am surrounded on all sides by candles.

Brian: [00:01:43] This is not an exaggeration. If you're listening to this, and you've never been to Phillip's office, home office, before then I can verify he's got it's like a circle of candles, almost like a cult thing.

Phillip: [00:01:55] That's like a seance. That is a veritable seance in this room. I'm in my seance room. I've said the world seance four times.

Speaker3: [00:02:03] The only thing is like if you get all those candles at once, it would smell terrible.

Phillip: [00:02:07] Oh, my gosh, it would smell bad. It would be a melange of flavors from hell.

Brian: [00:02:16] {laughter} Good by themselves.

Phillip: [00:02:16] I've got a lot of like the teakwood and tobacco and then some, you know, fruit.

Brian: [00:02:22] Actually that's awesome.

Phillip: [00:02:22] Yeah. Fruity notes. I like sandalwood a lot. I'm into that.

Brian: [00:02:26] Yeah I like sandalwood.

Phillip: [00:02:26] I've got some boujee candles, but I've got some notable brands. I haven't stocked up yet on any of the brands from our friends at Decorware who will be joining us here in just a little bit. But I am looking. I've been shopping a little bit. They have some really cool looking candles. You know, a candle, actually... Here's like there's a lot of challenges in shipping and candle. It's glass number one, typically.

Brian: [00:02:51] Right. Lots of breakage.

Phillip: [00:02:51] Yeah. But also you can't smell it online. That's a problem.

Brian: [00:02:59] We did a whole episode on this I feel like.

Phillip: [00:03:02] Yeah. There's a challenge in creating, like, amazing copy that really evokes the senses. And I think design actually and packaging do a lot more to sell a candle online than we think. And we dive into that a little bit today. I wanted to recall some of the challenges around shipping that I remember from my days in working on the brand side and shipping glass bottles. So I used to work for a wellness brand, and we had a an aesthetic which was very firmly rooted in sort of the what I would call like the old timey doctor aesthetic with, like brown glass bottle.

Brian: [00:03:43] Oh. So like that aesthetic that we all have right now.

Phillip: [00:03:47] Yeah, that's exactly right. We were very ahead of our time. A big challenge to ship those, especially if you're shipping them in flat rate USPS packages, like those things you go through... They've seen some stuff, man.

Brian: [00:04:00] How much packing would you have to put into your boxes?

Phillip: [00:04:03] Oh, gosh.

Brian: [00:04:04] I would imagine back then we didn't have the systems we have now that we're learning about where they can get the boxes right.

Phillip: [00:04:10] Very, very scrappy. Very scrappy. And, you know, like you try to get it in a flat rate box because that is the least expensive route most of the time to get a package to a customer. It's not always the fastest way, which is a whole other thing that we'll talk about here in this season of Step by Step. But I can just from my own experience in working in a business that had in-house fulfillment, I can only imagine what our buddy Keith Austria had gone through. And then to have the likes of which now shipping candles, shipping glass, that's its own challenge. Doing it for five brands, that's another challenge. Doing it in-house, oh, my gosh. And then doing that during a pandemic when everyone is stuck at home and they want to make their house smell like, you know, Citrus. Oh my gosh.

Brian: [00:05:02] It was candle mania. It was candle mania.

Phillip: [00:05:04] It is.

Brian: [00:05:04] It is candle mania

Phillip: [00:05:05] Still is, as I'm proving right now in my seance room. It's insane. And, you know, we don't really have a choice anymore. We have to be online. Brands don't have a choice and even at a lower price point and candles, you know, at the price point that Decorward sells at, they have no choice but to sell online and they have to meet customer expectations which are rising. And so when you're a business that ships product to a customer, you probably think of shipping as a cost center. But in this season of Step by Step, we're partnering with Shippo to help you understand why shipping can be leveraged as a growth engine. And so, yeah, that's what we're going to do today. Who's this podcast for, Brian?

Brian: [00:05:50] If you're listening to this podcast and you're an operator in a marketplace business or you're at a DTC brands, or if you rely on an eCommerce platform for B2C or B2B or B2B2C, or whatever B to C combination you have, or literally if you run an online retail channel, this podcast series is for you.

Phillip: [00:06:13] It's for you. If you are listening to this and you have the ability to hear it, then welcome. You're going to learn something today. Let's not waste any more time. I can't wait to learn something. And you know, in today's episode, we are going to answer the question, how can I wield shipping to acquire new customers and to build loyalty? And here today to help us answer that question is Keith Austria, the eCommerce Manager at Decorware International.

Phillip: [00:06:50] We are continuing our five part series in partnership with Shippo. This is Step by Step, Season 6. And today we have Keith Austria, who is the eCommerce Manager at Decorware. We're going to answer some questions about how does a direct to consumer business, an eCommerce centered business, use shipping to deliver exceptional experiences to their customers and build loyalty and turn it from a cost center into an opportunity to build loyalty in their business? Welcome to the show, Keith.

Keith: [00:07:20] Thank you for having me, guys.

Phillip: [00:07:23] We have to let the cat out of the bag. You guys, you make candles is what I understand.

Keith: [00:07:27] Yes, we do.

Phillip: [00:07:29] Tell us a little bit about your your line of brands and what you do at Decorware.

Keith: [00:07:34] Yes. I'm the eCommerce Manager here at Decorware. We actively manage six brands. It's always expanding. Under Decorware we have multiple brands. So there's DW Home, Makers Wax Goods, Haven Street Candles, Lab Candles... Different brands geared towards different demographics, different age groups. So we're just trying to maximize where we can.

Phillip: [00:08:03] And I'm the candle head at Future Commerce. I'm a little bit of a... I've got a candle problem, I'll admit it.

Keith: [00:08:11] That's ok.

Brian: [00:08:12] This is a real, actually.

Phillip: [00:08:16] I'm a fan. Wow. So we are trying to get down to the root of well, you know, hey, in eCommerce, eCommerce is growing. But we have all experienced with the pains around what shipping can be, as through the height of the pandemic. And then we had shipageddon last year. If anyone remembers that. Shipping is a vital part of your experience with your customer. How is shipping a core priority for your business at Decorware?

Keith: [00:08:50] Well, I mean, nowadays, especially when you see with Amazon, everybody wants something within the next hour. So it's getting the product to the customer as safe and as quickly as possible. So, I mean, like you said, during the pandemic, we encountered multiple factors that kind of slowed us down, whether it was social distancing, whether it was the lead times for USPS or any carrier service to deliver just because everybody was so bogged down and so understaffed just to follow guidelines that it just basically slowed everything down.

Brian: [00:09:32] That's a very common story, I think, for a lot of merchants out there. And what I'm really, really excited about to learn from you in this episode is... We've been getting all these different perspectives throughout this series and everyone that continues to listen will continue to get these perspectives. But for you to come in as a merchant and tell your story is a really, really important part of understanding how to turn shipping from, and sort of switch your mindset from, like, it being something that's like, OK, it's costing more money to ship things now, and things are slowing down and everyone's trying to put things through the pipeline. And we just came off of the pandemic. And everyone's behaviors are still to order things online. We haven't seen too dramatic of a decrease in online shopping. So the shipping pipeline is still full. So if a brand takes two to three weeks to deliver a product right now, what does that do to their customer relationship? Does it do anything? I mean, let's just pretend for a minute that you even said it like it's going to take us two to three weeks to ship this product to you.

Keith: [00:10:56] Yeah, that customer most likely. Is it going to be coming back if they could go to a big box store or their local store to pick it up just because the ease of getting it and having it delivered straight to them, not having to worry about the whole pandemic or the virus when they're going out. Some people are still afraid. And I mean, that might be the case for the next year, a couple of years to come. Who knows what's going to happen?

Phillip: [00:11:23] And I keep hearing too, there's a a thought or mentality or a thought process that we tend to have depending on where you live and how you're affected by it. I live in South Florida. We haven't had any rules pretty much the whole time. But since October, everyone here just decided to like, you know, just ignore whatever mandates were in place and just kind of go on with real life. And not the case in Canada. Canada is having some serious challenges right now with a COVID hot spot. I know India is unbelievably affected. What is your footprint like and where do you ship and are these real concerns that you have to think about on a state by state or country by country basis?

Keith: [00:12:14] Now not so much. So the lead times on delivery of the packages has come down significantly. Before it could have gone anywhere from a week to two weeks. Now we're back down to three days, which is kind of our target point. Anywhere from one to three days is where we'd like to be, depending on where it's shipping to in the US. But like you said, we were hit hard in California. I know, like you said, Florida didn't have too many rules and regulations against it. But California, we went on lockdown. And the minute that happened, it just seemed like the online business just boomed. They couldn't go to the big box store to buy what they wanted. And everybody went to online. And the post office was feeling the volume. And I'm sure you UPS and FedEx were, too. So everything just kind of slowed and didn't help that you couldn't have your full, full force behind it. And you had to have a limited amount of employees in at a certain time just to make everybody feel safe and comfortable to actually even come into work,

Phillip: [00:13:17] Not even just the carriers then. It's like just getting it picked and packed is a challenge.

Keith: [00:13:26] Yeah. I'd say from both sides it was just have a sandwich. You're trying to get people in and then you're trying to also get the product out. And there's a little bit to juggle.

Brian: [00:13:37] So in going into the pandemic, I think people sort of recognized, the customers recognized, that shipping pipelines are a little bit clogged. There might have been a little bit of awareness around that, probably more so than prior to the pandemic when people were like, "I expected this package now," like it was a little bit more, a little bit less grace about that sort of side of operations. But now coming out of the pandemic, we've seen shipping capacity sort of rise. Consumers are sort of back to like where the Amazon promises is back. Like even Amazon during the pandemic was a kind of struggling a little bit to deliver on the Prime promise. So now that we're kind of in a spot where expectations are shifting, how do you expect that people are viewing shipping right now? If it's a baseline, like you've got to get shipping right, how can you sort of change your view and look at shipping as a way to get out there and acquire new customers or maybe retain existing ones?

Keith: [00:14:51] Yeah, you know, it's actually funny is I feel like coming out of the pandemic, our customers are more understanding. So if it's going to take extra days they're ok with it. They saw it at the peak when you weren't getting a product for maybe a month, and that's a long time if you think about it. So if it's something that's delayed three days, two days, one day, I mean, they're understanding. Where before, at the beginning of the pandemic, they just weren't understanding. They didn't get what was going on. When everything settled in and they realized, like, ok, well, there's certain things that are in place where it's out of the you know, the vendors control. Like, they can't just bring everybody in, get all these orders out. And after that, it's like, ok, well, the post office has the exact same problem, too. They can't have their full force working. It's going to slow them down. So the customer themselves, I mean, I feel like they're more understanding coming out of it, which is definitely a huge help because, I mean, the last thing that we wanted to deal with during the whole pandemic is fifty million emails coming in and saying, hey, where's my package? You know, and it's just, "It's on its way," or "We're understaffed right now trying to follow certain guidelines. We're getting everything out as quickly as possible."

Phillip: [00:17:08] There's a probably a scale challenge to because you are not just fulfilling in-house for one brand, you have six brands.

Keith: [00:17:21] Yeah. Yup.

Phillip: [00:17:22] And does that sort of exacerbate some of the operations and requirements for you to sort of have to handle the scale of five or six different brands where some folks are assuming they're just dealing with one small business, but instead your operations are sort of consolidated, I'm assuming, across the six brands.

Keith: [00:17:46] Yeah, lucky for us, I mean, it's easy for our pick, pack and ship. It's not anything different. We just saw one of our brands really take off. The other ones, I mean, they did well as well, but I mean nowhere near what our main brand did, which is DW Home. But yeah, it was a bit of a challenge, but we were able to muscle through it.

Brian: [00:18:13] So tell me a little bit. So stepping back from the pandemic, what are some of the typical challenges that you would face when you go to ship in order? I would imagine there's a whole bunch of things, lost packages, breakages, you know, boxes and packing, things like that. So tell me a little bit about some things you might struggle with as you go to get an order out the door.

Keith: [00:18:41] Yeah. So our biggest thing. [00:18:44] So before the pandemic, not to go back onto that, but we would average, say, two hundred orders a day. During the height we did as many as fifteen hundred orders a day. So just the volume itself, and for us it's we ship candles. It's not just a cookie cutter thing where you're doing clothes or a hat or a shirt where you just throw it in a box. All of our stuff is different sizes, so it has to be packed accordingly. So what we found is the batch function on Shippo to be able to copy a certain order numbers into the search bar up top, search those and batch print those out saved us a tremendous amount of time. [00:19:28]

Phillip: [00:19:31] So there's an operational efficiency in shipping, especially when you're in-house fulfilling. There's some of the same software that allows you to ship onesie twosie can also allow you to hit incredible scale that you hadn't. What is it like having that kind of scale hit your business all at once? How did you adapt? Obviously, the software adapted, but you're shipping physical goods. What was that like?

Keith: [00:19:58] Scary and exciting. A little bit of everything all at once. To see that many orders come in is, you know, great for the business. And then when you're taking the step back and realizing, like, you're going to have to figure out how to do this with less people and you're doing it 4X amount of orders, that's the scary part. But luckily, we were able to figure out certain roundabout's that not necessarily cut corners, but cut time off of certain things you were doing, especially with the batch. That was the biggest thing I would say for us. The next thing that we're going to be looking into, just because the actual volume hasn't come down back to where it was, is automations, and Shippo's got a great thing for automations. And I think that's the next thing that we want to look into to fully automate our label printing process.

Phillip: [00:20:55] Automation are really going to help you sort of get that unfair advantage to have more growth on top of even still being a little bit shorthanded. If the growth maintains and you've retained all these customers and it's not slowing down, does that cause other issues post purchase? For instance, are return rates or breakage or damage or lost in transit becoming a factor that also has something that you're going to, a challenge you're going have to rise to meet?

Keith: [00:21:23] Yeah, I mean, the biggest challenge I'd say that we're having right now, especially with the post office, is for filing claims. So if a customer receives one of their candles and it's damaged, before we were asking them to provide a picture so that we could submit a claim ourselves to USPS and then we would refund or send them back out to replacement piece. USPS, since we buy through Shippo and not have a business account directly with USPS, they looked at us as a consumer. So when we would place the claim, they would actually want us to come in, bring that physical box with the candle and show them, which for us it wasn't even an option. We're not going to have our customer handle damaged or broken glass and risk of injury for them, which is more of a liability than it's worth. So I'd say that's probably the biggest. I mean, everybody is going to have lost stuff. That lost stuff nine times out of ten is going to be something that was stolen from someone's residence. That's out of everybody's control, unfortunately. But I would say the breakages was a big thing for us. And we're actually in the works with Shippo to try to figure out a way that we can file those claims and actually be reimbursed, which would be huge. Candles are glass. They break. So it is something that is bound to happen. Everybody's in a rush. They're kind of maybe throwing the packages a little bit more than they should at the post office, but they're just they're just trying to get it out in the quickest possible way, so can't blame them.

Brian: [00:23:06] Do you think that the operational improvements that you had to make over the pandemic are making you actually a better organization coming out of it? And how do you feel like that improvement, or if you if you do feel that way, how do you feel like that improvement is going to impact your customers? Like how is that going to change your relationship with them?

Keith: [00:23:27] Well even just with order processing times we're able to find the shortcuts and figure out how to do things in less amount of time. It just allows us to get the order out the door quicker. And that just means it's going to get to the customer in a shorter amount of time and they're going to be happy. And hopefully those come back and keep buying more.

Brian: [00:23:47] That makes sense. As you look ahead, and I mentioned, you know, impact on customer, have you seen any changes in purchasing behavior from your customers? And obviously there's more purchasing online, but their path to purchasing and and sort of repeat customers. Have you seen any sort of mindset shifts in the way that they think about your products and how often they get it? And are there more people that are doing recurring orders now? Or were there any shifts in how they're interacting with your brand?

Keith: [00:24:27] Our returning customer percentage has definitely gone up. That's partly because we had the pandemic to thank. People were brought to the website. They realized the ease of ordering online and the simplicity and were able to have something delivered straight through their house. The thing with our brands are you go to a big box store, whether it's TJ Maxx, Marshall's Home Goods, you don't know what they're going to have. It's like an Easter egg hunt. You go there, they have your candle you want. Great. If not, then, you know, they have another outlet where they come online and can pick and choose and not have to wonder what's going to be available, you know. So that's something that's geared more towards the consumer, and it's great that they could come online and find what they want rather than going on Easter egg hunt.

Phillip: [00:25:17] And would you say that your shopper is the sort of shopper who might be, you know, who might be enticed to frequenting an online brand as opposed to going in-store and not necessarily being satisfied? Are you able to build that loyalty with that shopper? What are some of the things you do post purchase to ensure that loyalty?

Keith: [00:25:39] That's hard too, because I actually feel like some of the people that go to the stores actually get a thrill out of not knowing what is there. So that's kind of works against us in the same sense. But there's certain perks that we have where if they're ordering a certain amount, they become, you know, in certain tiers and there's money off. So there's benefits to coming online. And it's not just being able to pick the scent you want. It's being a part of a VIP membership club. Or we're also looking to possibly do monthly boxes where you subscribe, and we just send you out a box of candles every month.

Brian: [00:26:16] I think that makes a ton of sense. What about on the product side? Like, is this influencing how  you're developing products like potentially exclusives, online exclusives, or other things that you couldn't get anywhere else?

Keith: [00:26:30] No, we don't do too much online exclusives. It's pretty much open to anybody. There are a couple of things that we did in the beginning that were online exclusive, but then we opened them up to the big box stores. It is nice to have that exclusivity because it makes them want to come to the site. If you can't get that in the store, you come to the website and you get that candle and that's the only spot you can get it.

Brian: [00:26:57] So it sounds like you did some early release stuff and then open it up to big box afterwards?

Keith: [00:27:02] Yup.

Brian: [00:27:02] I think that also makes a lot of sense if you see success with those. That's really, really interesting. Yeah, I think you start to get into roadmap a little bit there. Looking ahead to 2022, which is not that far away.

Keith: [00:27:15] Yeah.

Brian: [00:27:16] What are some of the things that you expect to want to implement or that, you know, some challenges that you expect to face where shipping is going to help expand new markets or other things like that? Like what are the opportunities you have there?

Keith: [00:27:33] Right now, I mean, just operational wise from the growth we're actually seeing that we've maybe outgrown the space that we're in right now. So we're actively looking for another warehouse to expand and grow into. This is our biggest hurdle now. Going into 2022, we hope to be fully automated with the label printing, which that by itself would save us a ton of time and be able to focus in other areas that can benefit the online business.

Phillip: [00:28:06] Congrats on all the growth. I think that's an incredible. And you know what they say, "You always have to rise to the next challenge." So many of us buy things online and really don't think about what the business challenges are around operations that make it all work. Getting a product to the door in whatever period of time is actually kind of a miracle, we're finding out. So many businesses and people that are involved in so many different steps that it's kind of incredible that it even all works.

Keith: [00:28:39]  [00:28:39]We actually you take it for granted. It's like you order something online and you're like, "Well, why isn't it here yet?" You know? And once you really dig into it and see what the company does or what challenges they have to actually get that product into a box, picked up, and out the door. It's like you said, it's kind of a small feat. [00:28:59]

Phillip: [00:29:00]  [00:29:00]Well, again, congratulations on on the growth and the success. And if you if you had to, if you were the one listening to this, is there any advice around solving some challenges and operations and logistics and just owning your own logistics operation that you can give to other listeners who are in direct to consumer eCommerce businesses that might be looking to try to solve some of their own problems as well?

Keith: [00:29:26] Batch printing and automations. I mean, that's the two main things that will help you up tremendously.

Phillip: [00:29:35] Awesome.

Brian: [00:29:35] That's a great piece of advice. Thank you so much, Keith, for all your insight and your experiences over the past 18 months and opening up your roadmap to everyone who listens to the show a little bit and giving some good insight. Thank you very much for joining Step by Step.

Keith: [00:29:56] Absolutely. Thank you, guys.

Phillip: [00:30:00] Thank you so much for listening to this episode of Step by Step. Remember, we have five other seasons available, and you can get all of those at FutureCommerce.fm/StepbyStep. And thank you so much to Shippo for sponsoring this season of Step by Step. Remember that Shippo has everything that your business needs to manage customer delivery experience. You can click, print, and ship and that's it for free, and you can get started today by going to goShippo.com/FutureCommerce. Thank you so much for listening to Step by Step.

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