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Delivering the Online World: Spring 2018 | Canada Post

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Delivering the Online World magazine shares effective online customer acquisition and retention tactics and techniques from successful Canadian retailers. The magazine highlights e-commerce numbers to pay attention to, and case studies and tips to help you build your business. In this issue, learn about Oatbox’s growing breakfast subscription box service. The service delivers healthy breakfasts to hungry professionals who are starved for time. We examine their business model which couples direct-to-customer ecommerce with subscription-based sales, their quick fulfillment and shipping process, and how the company is strategically targeting new customers through direct mail – with a little help from Canada Post.

Learn how to optimize your online sales and delivery processes:

http://www.canadapost.ca/ecommerce

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Delivering the Online World: Spring 2018 | Canada Post

  1. 1. Applications open for 2018 E-commerce Innovation Awards. See p.23 DELIVERING the Online World TM Spring 2018 “There’s no excuse for skipping breakfast.” President of Oatbox Marc-Antoine BovetE-commerce operations Seven steps to master now Packaging How the right packaging strategy can grow your company Oatbox delivers healthy meals and standout business results Rise  &shine
  2. 2. 10 18 Sign me up It’s a refrain that Oatbox is hearing again and again as its subscription-box business takes off. 13 Mastering your e-commerce operations How to optimize every stage of your workflow – and satisfy customers 5 Letter from the CEO Jessica McDonald, Chair of the Board of Directors and Interim President and CEO of Canada Post, reflects on our commitment to help Canadian businesses grow. 7 Industry insights Surprise! Millennials like print advertising; metrics to gauge your business’s health; and customer acquisition mistakes to avoid. 13 Take cover The right packaging is key to your business. It’s got to protect your products, but there’s more to it than that. Done right, your packaging strategy can enhance your bottom line. 16 Holiday countdown Start planning now for the make-or-break shopping season. Our annual research shows you how to make the most of this lucrative – and very short – window. 18 Mastering e-commerce operations From receiving an online order to dealing with returns, every- thing you need to know to master e-commerce operations. Spring 2018 Canada Post and you 22 Operate more effectively and expand efficiently – that’s what business owners learn at GROW workshops. 24 We make it easy to expand your business to international markets. 25 After a digital-only marketing diet, Structube creates a print catalogue and fills up on in-store traffic. DELIVERING the Online World ™ Trademarks of Canada Post Corporation. Word and design marks of Bing, Cook it, EcoDiva Beauty, Facebook, GetOutThere, Golf Avenue, Google, Instagram, Oatbox, Pinterest, Simons, Structube, The Packaging Company, Yahoo and Zebra belong to their respective owners. 26 QA The future of direct mail is bright. Here’s how your business can benefit. Rooted in Québec, La Maison Simons is a fifth-generation retailer that has a network of 15 stores in Quebec, Alberta, Ontario and British Columbia with a modern shopping environment that makes it a world-class fashion destination. Supported by service designed to delight customers, the company offers a selection of unique, accessible and trendy products presented in original and innovative spaces, as well as through an ultra-performing web platform. Getting online shoppers to add items to their cart and click checkout is only half the battle for e-commerce businesses. The Packaging Company launched in 2016 with a goal of helping retailers customize and simplify their short-run packaging and logistics. It offers affordable and creative custom packaging and supplies for retailers of all sizes, whether they’re filling 100 orders a month or 1,000. Businesses can tailor the eco-friendly packaging to their needs by selecting box styles, sizes, weight requirements and a large palette of colours. THINKING OUTSIDE THE BOX simons.ca thepackagingcompany.com WINNER 2017 Best Omni-Channel Retailer Award (Large) WINNER 2017 Most Disruptive Start-Up Award STYLE FOR ALL
  3. 3. Simplifying family life one meal at a time. This Montréal-based meal-kit company focuses exclusively on families and allows busy parents to enjoy both their careers and home life. Customers save time preparing meals but still eat fabulous food. Subscribers create a menu online and receive a box of fresh ingredients and step-by-step instructions at their doorstep. All meals are planned by a team of chefs, and recipes are usually ready in under 30 minutes. Fewer unplanned trips to the grocery store mean more time for stories around the dinner table. Essentially, Zebra Technologies gives physical things a digital voice. Its innovative tracking technology and solutions, provide companies with actionable information and insight that enable unprecedented visibility into their businesses. Zebra’s portfolio of solutions gives real-time visibility into everything from products and physical assets to people. Precise operational data allows companies to know both where things are, and what condition they are in. The end result? Business leaders are empowered to not only make better, more informed decisions, but to also respond in real time. Delivering the Online World 5Spring 2018 I’d like to begin this letter by saying that I am delighted to come aboard Canada Post, as Chair of the Board of ­Directors and ­Interim President and CEO. As Canada Post navigates deeper into the digital world, delivering on partnerships with small- and medium-sized businesses through new, innovative services is key to our mutual success. In today’s online world, competition is at an all-time high. Margins are tighter than ever. The retail landscape is increasingly crowded and complex. To best serve you, we have been working to understand your needs, and what it takes for you to compete and grow in today’s retail space. Then we focus on finding ways to enable you. Our current issue of Delivering the Online World reflects this commitment. Every story provides insights that can help you grow. On page 18, you’ll find an overview of our new e-book devoted entirely to mastering your end-to-end ­operations. It’s packed with actionable information focused on not just helping you to survive, but to thrive. We get into packaging on page 13, which often is seen solely as a necessity, but it’s more than that. It’s an opportunity – and we show you how to seize it. We’ve also invited e-commerce expert David Nagy to share his knowledge on the six KPIs all businesses need to pay attention to. His list, found on page 8, may surprise you. And every issue, we make sure to bring you stories from retailers like you who are succeeding. In this issue, our cover story on page 10 features Oatbox, the intrepid oatmeal subscription company that launched in 2014. It’s been growing ever since. Of course, when it comes to growing I immediately think of the Canada Post E-commerce Innovation Awards, in which winners receive up to $100,000 in free shipping and all finalists gain from increased brand recognition. Don’t forget to get your application in by May 30! You’ll find details on page 23. We hope this issue informs and inspires you to find new ways to grow – and that it reflects our ­commitment to serve your needs and drive your success. Jessica McDonald Chair of the Board of Directors, Interim President and CEO Canada Post LETTER FROM THE CEO THE POWER OF PRECISION chefcookit.com zebra.com A WINNING RECIPE WINNER 2017 Pure Play of the Year Award (Small) WINNER 2017 Canada Post E-commerce Innovator’s Award
  4. 4. TM Delivering the Online World 7Spring 2018 INDUSTRY INSIGHTS ONLINE WORLD BY THE N U M B E R S 1. Statistics Canada. 2,3. Mintel, Marketing to millennials, Canada – February 2017. 4-10. Canada Post, Phase 5, Advertising Communication Preferences and Generational Differences (2017). 11. Canada Post, Connecting for Action (2016). CHAIR OF THE BOARD OF DIRECTORS, INTERIM PRESIDENT AND CEO CANADA POST Jessica McDonald CHIEF COMMERCIAL OFFICER Doug Ettinger DIRECTOR, COMMERCIAL MARKETING Danielle Doiron MANAGER, PARCELS AND E-COMMERCE Lindley Graham EDITORS Jasmine Miller, Cynthia Reynolds MANAGER, GRAPHIC DESIGN Céline Morisset ART DIRECTION AND DESIGN Kim Mallette CONTRIBUTING WRITERS Nancy Carr, John Greenwood EDITING, PROOFREADING Christopher Mallory SPRING 2018 DELIVERING the Online World ON THE COVER Marc-Antoine Bovet, President of Oatbox, in the company’s Montréal kitchen. Delivering the Online World is published by Canada Post. CANADA POST 400 HUNT CLUB ROAD OTTAWA ON K1V 1C1 PM42983513 © 2018 Canada Post Corporation. May not be reprinted without permission. Applications open for 2018 E-commerce Innovation Awards. See p.23 DELIVERING the Online World TM Spring 2018 “There’s no excuse for skipping breakfast.” President of Oatbox Marc-Antoine Bovet.E-commerce operations Seven steps to master now Packaging How the right packaging strategy can grow your company Oatbox delivers healthy meals and standout business results Rise shine DELIVERING the Online World TM ARE YOU RETURNS-READY? 33% of shoppers will complete their purchase if your returns experience is easy. Learn the steps to designing your ideal returns strategy. Download our Returns Guide or book a free consultation at canadapost.ca/returnsstrategy. Born between 1981-2000 9.6 million in Canada* 26% of the population1 65% 55% are overwhelmed by how many promotional emails they receive 4 What gets their attention? 44% of respondents were driven by print or direct mail promotions 5 How does direct mail go the distance? use a physical method to follow promotions 9 more attention than single-media digital campaigns 11 were driven by print or direct mail promotions 10 Don’t believe the myth that millennials only react to digital. Research shows that they eagerly engage with print because they value the physical and have a desire for real experiences. For this group, it’s not about choosing between digital or print; it’s about using both in a compelling way. Print matters to millennials increase in print engagement when kids are in the home 85% are financially independent2 of millennials feel they spend too much time online 3 16% 81% 50% 42% are excited to see what’s in their physical mailbox 8 keep promotional mail pieces for future reference 7 of millennials in young families engage of millennials without kids 6 vs.91% 31% 39% Integrated campaigns elicit Of recently made purchases, *As of 2017. 75% Print helps drive them to purchase PRINT STANDS OUT
  5. 5. Delivering the Online World8 canadapost.ca 9Spring 2018canadapost.ca8 INDUSTRY INSIGHTS The simple six INDUSTRY INSIGHTS E-commerce numbers you should track By Nancy Carr Acquisition no-nos When it comes to customer ­acquisition, knowing the ­mistakes to avoid is key You don’t just want new customers, you need them. They are critical to your growth. But even at the best of times, the road to customer acquisition is long, difficult and costly. The last thing you want to do is make it harder. Know these eight missteps and mistakes – so you can avoid making them. 1. Allowing short-term results to rule you Customer acquisition takes time – a lot of it. You should give your strategy the chance to work within the timeframe you set, rather than make knee-jerk changes to it based on short-term results, which can be deceptive. Be prudent, not panicky. 2. Failing to allocate enough money to the cause If you don’t properly fund your strategy, it won’t work. Acquisition needs are different for every business – so make sure you think about yours carefully and invest accordingly. 3. Undervaluing customer data Data can help you define your best customers so you can find lookalike audiences based on demographics, geography, psychographics and life stages. If you don’t know how to use the tools - learn to. There is a wealth of courses, tutorials and workshops that can teach what you need to know. 4. Sticking to the road most travelled If you’re only advertising in places where your competitors dominate, then it’s going to be harder to get your message noticed. Explore options that are less crowded and less expensive, like Bing or Yahoo or the mailbox via direct mail marketing. 5. Existing in a single ­dimension Knowing how you best connect with your customers is vital – but sticking to one point of connection can strangle growth. Strive for an integrated, multi-channel approach. 6. Not knowing your ­customer acquisition cost Look to your left. It’s one of the six metrics that e-commerce expert David Nagy says you need to know. 7. Overlooking your ­existing customers If you have loyal customers, then you have a low-cost vehicle for acquiring new ones – use it. Encourage online reviews, launch a referral program or create content worth sharing. Increase your customers’ loyalty by providing exclusive benefits, such as discounts, to further boost the likelihood they will advocate for your brand. 8. Letting first-time visitors get away Don’t let first-time visitors slip through your fingers. It’s a hard truth that they’re unlikely to come back to your website without prodding. But retargeting (there are tools for every budget) can get your brand in front of their eyes after they leave your site. They’ll be easier to acquire than a fresh prospect. If you own an online business, that likely means you’re the ware- house supervisor, bookkeeper, marketer, chief cook and bottle washer. But entrepreneur and online marketer David Nagy says successful e-tailers need to wear one more hat: numbers geek. Nagy, who started the online resource ecommerce canada.org and whose e-commerce businesses include EcoDiva Beauty and GetOutThere. com, says there are numbers every e-tailer should know about their business. “These are six that are going to work for everyone, from a shoe store owner to a spice business operator,” says Calgary-based Nagy. Revenue-tracking numbers Sessions is Google’s term for the number of visitors to an e-commerce site per day. It’s the same as visits, hits or traffic. Sessions are the easiest measure to change, through things like a direct mail campaign or a pay-per-click social media campaign. Conversion rate tells you how many of your site visitors are buying. It’s calculated by dividing the number of purchases by the number of sessions. For e-tailers, a 1.5 per cent conversion rate is a good benchmark to aim for. Average order value (AOV) reveals the average value of each order placed on your site. It’s calculated by dividing the total sales by the number of basket purchases. For example, $10,000 in sales from 200 transactions yields an AOV of $50. Adding free shipping at a certain price point is one way to raise your AOV. Profit-tracking numbers Unit economics indicate how much profitability your business generates per unit. They’re calculated by subtracting direct costs (marketing, packing supplies, shipping costs, bank fees, returns) from gross profits. Track unit economics for just your 10 best-selling products, and you’ll be ahead of most businesses. Customer acquisition cost (CAC) tells you how much you’re paying to acquire new customers. It’s calculated by dividing marketing costs for a time period by the number of new customers acquired over that period. If costs are higher than the revenue new customers generate, business will suffer. Customer lifetime value (CLTV) shows how much profit the average customer generates throughout the business relationship, and it can help in deciding how much to spend on customer acquisition marketing and when. It’s best calculated by plotting a graph that shows the number of months since customers were acquired and the incremental net income from those customers. For more on these metrics, read David’s blog series at canadapost.ca/growthmetrics.
  6. 6. Delivering the Online World 11Spring 201810 Marc-Antoine Bovet knows that successful entrepreneurs don’t just sell products. They solve problems. So, when he and four friends founded Oatbox in 2014, what problem were they aiming to solve? How to make it easy to serve healthy breakfast foods to busy people. “Breakfast is considered by most experts to be the most important meal of the day,” says Bovet, the company’s 30-year-old president, from his office in Montréal. ­“However, more than 50% of North Americans don’t eat breakfast every day. We saw this as an opportunity.” Having already launched and run one successful business – online golf equipment reseller Golf Avenue – Bovet was young but experienced. For his new start-up, the business school graduate opted to couple the direct-to-customer e-commerce channel, which would reduce expenses by cutting out the go-­ between, with a subscription-based business model that would allow the founders to generate the steady revenue needed for growth. An organic customer ­experience At its inception, Oatbox focused on creating one product: granola. For $20 a month, including shipping and taxes, subscribers receive two bags of granola, or enough for about 16 to 20 breakfasts. But this isn’t your basic 1970s health fare. Flavours include raspberry and white chocolate, or wild blueberry and coconut. Most of the ingredients are organic, and customers have gluten- free, nut-free and kosher options as well. The ­company’s packaging is simple and elegant, so receiving a package in the mail is a treat. The online ordering process is quick and easy. As soon as an order is received, the baking begins at Oatbox’s facilities in Montréal. Within 24 hours, it aims to ship orders, which then get delivered by Canada Post to customers across the country. Oatbox also ships to a growing number of customers south of the border. To strengthen the customer experience, the company sends an email right before the next month’s shipment, giving subscribers a chance to change, reduce, increase or even put their subscription on hold. “We built the service as if we were going to subscribe to it for ourselves,” Bovet says. “The last thing that you want is to feel handcuffed by subscribing to something that you don’t want. If you want to leave, there’s no penalty, there’s nothing.” Expansion plans With growth in mind, the company continually invests in the research and development of new breakfast products and innovative flavours. Over the past three years, it has gradually added to its lineup multiple flavours of granola, instant oatmeal, steel-cut overnight oatmeal and high-protein breakfast granola bars. In February, Oatbox introduced its latest offering – and one of the most essential components of a go-getter’s breakfast: coffee. “Our clients are young profes- sionals, young moms, families. People who are just trying to eat a healthy breakfast,” Bovet says. “There’s really no excuse for skip- ping breakfast when you can order it right to your door like this.” For those who still don’t make breakfast for themselves at home, Oatbox recently started Oatbox for Business, a service that delivers its products to over 40 offices in Montréal. It’s a perk for staff – and a growing trend – that Bovet says Four years ago, Oatbox launched a subscription service that made it easier for time-starved ­professionals to get a healthy start to their day. It’s been expanding ever since. By Nancy Carr Photography by Mario C. Melillo / Pinpoint National canadapost.ca Breakfast in the mail
  7. 7. Delivering the Online World12 canadapost.ca 13Spring 2018 can help businesses attract and retain talent in a competitive labour landscape. “It’s only about $1 per portion for breakfast, so for an employer to make sure their employees are well fed, able to concentrate, not thinking about what they’re going to have for lunch at 10 am, it’s worth it. They’re eating healthy now, instead of having nothing or just a croissant or a doughnut.” Bovet says. “We’ve also found that people are saying they get to work earlier knowing that Oatbox is being served in the morning, and we’re really happy about that.” New ways to attract new customers While Oatbox for Business is only available in Montréal for now, the rest of the company’s products are shipped all over North America. It ships 25% of orders to the U.S.; however, with an eye toward growth, Oatbox is looking to expand that number. Last June it raised $1.55 million in seed funding, which will be put toward the southern expansion strategy. “That was huge for us,” Bovet says. “Basically, we were looking for the funds to give us the means to reach and acquire new customers in both Canada and the U.S. We’re a subscription business and everything is based on the Internet, so we’re always looking for new ways to attract new customers and get them to subscribe to Oatbox, and that costs money.” Most of Oatbox’s marketing in the U.S. and Canada is digital, with a heavy reliance on social channels such as Facebook, Pinterest and Instagram. But the company will add a physical channel to its customer acquisition strategy in 2018, by working with Canada Post to experiment with its direct-mail and samples-in-the-mail solutions. “We really like that Canada Post has access to a lot of data to segment and target customers efficiently,” Bovet says. “Canada Post has been a great partner. From day one, they believed in our project, and they always look for new ways to improve their service as we continue to grow.” While the company doesn’t disclose sales, it says that thousands of subscriptions are filled every month, and the number is growing. It’s quite an accomplishment for Bovet, who had stopped making breakfast a regular part of his day before he co-founded the company. His go-to morning meal now? One of Oatbox’s breakfast bars or its mixed berries oatmeal. For an entrepreneur always on the go, it’s the perfect solution. DTOW Our clients are young professionals, young moms, families. People who are just trying to eat a healthy breakfast. There’s really no excuse for skipping break- fast when you can order it right to your door like this. Oatbox’s nutritious breakfasts, delivered right to subscribers’ homes in beautifully designed packages, have been a big hit with time-strapped professionals in Canada and the U.S. Choose carefully and you could save money, extend your brand and generate goodwill. Here’s what you need to know. Success in e-commerce depends on finding the right product to sell to the right customers, but a factor that entrepreneurs often fail to master is how they’ll get their product – undamaged and looking good – into customers’ hands. “A lot of e-commerce businesses have no idea how important it is to get this right,” says Olivia Pietersen, E-Commerce Business Manager at The Packaging Company. “It’s hard to believe,” she says. Harder still because packaging is having a moment, and for good reason. From new materials that lighten your environmental footprint and allow for transport of perishables, to custom shapes and sizes that reinforce your brand, packaging is presenting new opportunities for e-commerce merchants. Helping small businesses generate big results The Packaging Company (TPC), named Most Disruptive Startup at the Canada Post E-commerce Innovation Awards last September, provides quick and easy access to an array of packaging products and services, from simple brown paper mailers to highly customized, insulated containers. Company headquarters are in a 205,000-square-foot facility, nearly the size of four football fields. On a recent weekday morning, more than an acre was taken up by piles of unassembled brown corrugated cardboard boxes. Forklifts zipped between rows of 1.5-metre-tall rolls of paper and plastic wrap, double stacked; a dozen workers at a small production line assembled lunch- box-sized containers packed with tiny styrofoam pellets. Like its clients, TPC interacts with customers primarily through its website. If your needs are simple, scroll down a long list of off-the- shelf boxes, bags and pouches, plug in the quantity, colour and material you want, and order. For more ­complicated projects, Pietersen’s staff will work with you to design the Packaging strategies By John Greenwood Marc-Antoine Bovet, President of Oatbox
  8. 8. Delivering the Online World14 canadapost.ca 15Spring 2018 For efficient packing and shipping strategies, visit canadapost.ca/shippingblog. Green packaging The media is filled with stories of companies working toward a greener, more sustainable future. It makes sense for retailers to be part of that movement, and it can be as simple as using boxes and envelopes manufactured from recycled materials. Some packaging suppliers go further, sourcing raw materials from renewable non-GMO crops, with no wood pulp at all. Many of these packaging products can even be composted when they’ve fulfilled their purpose, eliminating concerns over disposal and landfill. On a more high-tech level, some suppliers have successfully replaced non-biodegradable plastics made from synthetic polymers with products made from other sources, such as dairy. According to the U.S. Department of Agriculture, the technology has the potential to replace conventional plastic wraps in the food industry. These options can cost more for e-retailers, but done properly, sustainability is a good investment. Your customers will thank you for it, and soon, they may demand it. The opportunity of temperature controlled packaging One of the biggest growth areas in ­e-commerce is food. Consumers are increasingly exploring online options for purchasing everything from cheese and organic vegetables to chocolate. That’s possible partly because of packaging materials offering better insulation and protection from the elements, so perishables stay cold longer. Food transport containers are rectangular boxes constructed of insulated nylon that come in a variety of sizes. Inside is a removable foam container with room for ice or heat packs. These containers keep food at the same temperature from the time it’s packed to the time it arrives at your customer’s door. If, like many start-ups, you have limited warehouse space, you should have at least three weeks’ supply on hand, based on the number of orders you move weekly. That way, if you have a spike in sales, you’ll be able to handle it without having to wait for another box shipment. The last thing you want is a customer order that you can’t fulfill for lack of packaging. Making the most of the opportunity As a retailer, you need to manage packaging size carefully: extra space in a box will increase your shipping fees. Your challenge is to find ­packaging that maximizes protection, yet takes up as little room as possible. But packaging also needs to reflect the company brand, says Pietersen. “We try to explain to people that they need to advertise themselves. Amazon does that… so why doesn’t everybody?” The packaging – not just the contents – of every parcel you ship should surprise and delight the person who opens it. “Maybe you have a luxury product, so you leave the outside of the box plain, but when the customer opens it up, [they find] beautiful tissue colours with your logo,” suggests Pietersen. If they tell their friends about it, that’s even better. In fact, one of the biggest trends on social media is unboxing videos. “It’s huge right now,” says Pietersen. “People actually record themselves opening their packages and they put it on social media – it’s the craziest thing.” Crazy or not, it matters, especially in a world where most businesses are going digital. “People are judging your company,” says Pietersen. And what’s on the outside counts. DTOW most suitable and cost-effective solution. “Most dot-coms [that we deal with] are small businesses that are starting out. They have these great ideas and they send us pictures that they’ve seen online, but they have no idea how to make it happen,” says Pietersen. TPC can help with design, create packages and print logos on them. TPC also has test facilities to determine how products can withstand vibration and falls. One of the best ways to prevent damage is to pack carefully. Specifi- cally, don’t overpack boxes – by putting a box inside another box, for example. And don’t add to package weight or bulk by using a box when a bubble envelope would work. How do you know how many boxes to keep on hand? According to Pietersen, retailers who sell a variety of different-sized products should always have three or four different box sizes. Retailers who sell just one product might get away with two sizes. The wider your product assortment, the more box sizes you’ll need. Watch the size Retailers need to familiarize themselves with their carrier’s specs and rules. That way they can choose packaging likely to fit their customers’ access points. For example, Canada Post delivers parcels to community mailboxes, condominium lobby boxes and parcel lockers. If ­packages are too big for those boxes and slots, customers pick up their packages from a retail outlet. That’s one more step before they receive their package. Void fillers Delicate items must have void fillers so they don’t break in transit. Bubble wrap has been a staple for years. These sheets of plastic air cushioning offer easy-to-arrange protection and are also reusable and recyclable. Air pillows are similar, but with larger air pockets. The simplest product – plain paper – is also affordable and eco-friendly, but doesn’t create a very interesting receiving experience. For versatility, foam is it. It can be cut or formed into almost any shape and completely fill a box. It’s popular for electronics and appliances, but it’s more costly and less environmentally friendly than other options. Package basics Whether you sell clothes or furniture, there’s a packaging solution for you. Polybags are waterproof and the lightest option, which means they can save you on shipping costs. They’re also reusable and recyclable, which can inspire good will from your customers. Because they’re generally standard size and lightweight, mailers are an economical choice for small objects, like jewellery. Bubble mailers offer the same benefits along with protection for breakables. Tubes are used primarily for posters, blueprints and other paper products, but because they create less void space, they offer fragile items more protection than a standard box. Boxes are ideal for sending large pieces or multiple items in a single shipment, but you need to get the right size: small items will need filler so they don’t move around; oversized and non-standard boxes cost more to ship. The branding potential Printing technology has come a long way in recent years and e-retailers now have the chance to customize in ways they never dreamed of. That means containers and packing materials in new shapes, colours and textures. From a marketing perspective, that’s a huge branding opportunity. TPC customers can order packaging in just about every shade of the rainbow, on the inside and outside; they can upload their logo to the website and have it printed on packages or the tissue paper inside. Enhancing your customer’s experience with unique and compelling packaging is one way smaller companies differentiate themselves from retail giants. It’s a smart place to invest your marketing dollars.
  9. 9. Delivering the Online World16 canadapost.ca 17Spring 2018 With the holidays continuing to dominate as the make-or-break season for retailers, it’s increasingly important to not only know the changing trends in consumer behaviour – but also how to apply that knowledge to your advantage. After all, successful retailers are flexible, adjusting their plans and optimizing based on data. To help retailers better understand how to strategically approach this year’s holidays, Canada Post monitored its parcel volume data and combined that with insights gathered by closely monitoring the holiday strategies of Canada’s largest e-commerce retailers. Three clear takeaways emerged. Stay tuned for more holiday insights from Canada Post. Sign up to receive our full Holiday Survival Guide and more great content at canadapost.ca/ecommsignup. The holiday season is getting longer Retailers should be prepared to extend their holiday selling season, as ­shoppers are buying more before and after the traditional holiday season, as well as making returns later. • Pre-Black Friday sales started November 14, with 74% of retailers offering pre-Black Friday Sales. • Year-over-year January 2018 parcel volumes surged, which could have been fuelled by an increasing number of holiday gift card purchases. • After Boxing Day, parcel returns volumes went up, with volumes peaking on January 2 and 3. Free shipping is king To really compete, retailers should try to promote free shipping during the holidays to entice shoppers and new customers. • 63% of consumers are looking for free shipping during the holidays, while only 74% of retailers are now offering it. • In 2017, there was a shift to more free shipping with no-restrictions promotions – making up 37% of all shipping promos. • Retailers offering free shipping with no restrictions saw a greater week-over-week volume lift than those that offered free shipping with a minimum purchase. Returns matter most during the holidays Retailers need the right returns solution to enable holiday sales. And promote it. • As consumers become more comfortable shopping online we are also seeing increased returns volumes. A third of consumers say the ease of making a return is a critical factor in their decision to purchase, and 18% will abandon a purchase over concerns about a returns policy. • Free returns may not be feasible for all retailers year-round, but ­considering the option during specific times like peak season can encourage customers to shop more. • This past season, 46% of merchants offered an extended returns policy to accept returns up to January 31, 2018. DTOW FREE RETURNSPrepping for the holidays Prepping for the holidays For retailers, the importance of the holiday season can’t be overstated. Our data reveals three takeaways that can help you strengthen your online strategy.
  10. 10. Delivering the Online World18 canadapost.ca 19Spring 2018 Mastering your e-commerce operations Everything you need to know to optimize them – and satisfy customers Achieving near-flawless execution in your e-commerce operations is critical. The entire end-to-end process, from receiving an order to processing a return, is about keeping your delivery promise, enhancing your brand and providing such a positive experience that customers will shop with you again. We can show you how to do it all. After in-depth conversations with Canadian e-commerce entre- preneurs, Canada Post compiled their insights into an e-book. You can download the full version at ­canadapost.ca/masterecommerce. Consider this a crash course – your introduction to the seven operations steps every e-commerce business needs to understand and master. RECEIVING AND MANAGING ORDERS Receiving an order starts the clock running on your delivery ­promise. How you manage that order shapes your customer’s perception of your brand. Inventory management and product visibility To offer the best customer experi- ence and reduce your own opera- tional hassles, keep track of and display what product supply you have to sell, versus what has already been allocated for recent online – or in-store – orders. E-commerce platforms have basic inventory management built in, but as they grow, some merchants integrate additional inventory management technology. It syncs all the information from your sales channels and your incoming supply. It may even assign UPC codes to SKUs and issue purchase orders when inventory dips. Integrated physical and digital channels If you already had a physical store before you started selling online, your challenge is to manage inventory and orders across channels. Consider the two common types of points of sale (POS) systems and their impacts on your inventory management: A. Modern systems – Each online purchase is automatically reflected in one synced inventory view. For omni-channel retail, this is the POS of the future. B. Legacy systems – (i.e. designed solely for physical stores): You can reconcile your in-store POS and e-commerce system manually. Or simplify the process by enabling your system with retail management software, which will connect the order management system and your e-commerce platform. If you’re fulfilling from store and integrate Canada Post’s Ship From Store solution with your system, it will allow a store to print the shipping label for an online order. You can also arrange for Canada Post to pick up that parcel. Sorting orders You’ll need to sort incoming orders and decide which ones take priority at the pick-and-pack stage. Here are your options: • First in/first out (FIFO): This is easy when you have a handful of orders at a time. When order volume grows, strive for a “clean floor” policy: Ship all the orders placed the previous evening until your cut-off time that day. • By speed of delivery: If customers chose next-day delivery, fulfilling their orders should take priority. Or you may prioritize orders that have to travel further, say from Vancouver to Atlantic Canada. • By customer service factors: You can give priority to exchanges or replacements, or to your most loyal customers (such as members). • Product deliverability: If one of several items that the customer ordered is out of stock, but that item is coming soon, you could wait for it, then fulfill and ship the entire order. FULFILLMENT SPACE – ­ORGANIZING TO ACHIEVE OPERATIONAL ­EXCELLENCE Set off an area for incoming ­inventory and outgoing orders. Upgrading fulfillment space Before you move to a larger space, think about your growth projections. You don’t want to quickly outgrow the new space. Neither do you want to lease more space than you need. Ask yourself these questions: • Is my product line going to change or expand? • Will I stock larger or heavier products? • If I need to bring in more ­equipment, will it fit? If growth compels you to move to a larger space, move well before the Christmas holiday season, so the challenges of moving and settling in are resolved before peak hits. Outsourcing fulfillment Some growing retailers engage an expert outside the company to manage the end-to-end of their e-commerce fulfillment; this is called third-party logistics or 3PL. While keeping warehouse management in-house gives you total control of your distribution ­processes, using an established 3PL provider gives you access to more logistical solutions and expertise that can let you focus on other areas of your business. Acquire Browse Buy Fulfillment Tracking Delivery Returns Loyalty ReturnsReceiving and managing orders Pick and pack Fulfillment space Receiving experience Shipping International
  11. 11. Delivering the Online World20 canadapost.ca 21Spring 2018 PICK AND PACK To minimize costs and meet your customer’s expectations, you need an efficient pick-and-pack process. It will allow you to ship promptly on time and error-free. Common picking strategies include these: Basic order picking – The picker goes through the fulfillment space and picks just for that one order. This works for a small number of orders. Batch order picking – Software tells the picker how many of one item to pick for several orders at the same time. Instead of one cart with one box for one order, the picker may push a cart with 10 boxes for 10 orders. This is the most common method used by mid-sized retailers. Zone order picking – This is for retailers with larger warehouses and is tech-enabled. Instead of the picker walking all over the warehouse to find all the items, one picker picks all the items stored in their zone. Setting up your packing station In a warehouse, you’ll have room for a dedicated packing station, but some principles apply even if you’re packing orders at your kitchen table. Stock the station with supplies and make it easy to reach everything. Around peak selling periods, assemble shipping boxes in advance. Optimizing packaging See our feature on page 13 for the best packaging strategies to save money and time and exceed ­customer expectations. SHIPPING This is your last chance to lay the ground work for an ­exceptional delivery experience. Your customers are expecting that; it could determine if they shop with you again. Printing shipping labels Many mid-sized merchants use an office printer to generate labels on plain paper or self-adhesive label paper. Thermal printers are best if you print a lot of labels. They cost as little as $200; they quickly spit out smudge-proof labels with barcodes and don’t need pricey toner. To print labels, you need a shipping system. Canada Post has a variety of free online shipping tools to help you print labels. We’ve also integrated our technology into many leading e-commerce platforms and shipping solutions. Other tools for shipping You also need a scale to weigh parcels and a measuring tape, even if you sell only a few items a day and have the manufacturer’s specs for each product. At some point, you’ll have to reconcile your item’s declared weight and size with your shipping partner. Accuracy is in your interest: If the weight or size is off even slightly, you’ll face additional costs. Getting the package to your carrier If you have only a few shipments per week, many merchants bring them to the post office. If you have enough volume, pickup service will save time. Canada Post’s pickup service can be on-demand or on a regular schedule. YOUR CUSTOMER’S RECEIVING EXPERIENCE Online shoppers have come to value and expect convenience, communication and speedy delivery. Here’s a snapshot of what else they want from you: Tracking – 96% of shoppers track their item in transit. You need to either enable parcel tracking yourself or allow your shopper to access your carrier’s tracking information. Many small and mid-sized merchants choose to make Canada Post’s tracking notifications available for their customers. Flexibility – Customers want options for where they’ll receive their item. Canada Post’s ­FlexDelivery™ service lets consumers choose a post office where they want their packages to be shipped. It’s convenient, secure and free to sign up on canadapost.ca/flexdelivery. RETURNS Shoppers want returns to be hassle-free, affordable and ­convenient; they want an easy-­ to-find returns policy on your website; they want only a few simple steps to complete a return; and they want choice. To optimize your customers’ experience, consider including a returns label in the box with their order. Some merchants want control over the returns process and visibility into it, so they authorize returns on-demand. To share the cost of returns with your customers, you might • adopt a flat or discounted shipping rate on returns; • charge a re-stocking fee to help offset your costs; or • or offer a credit toward a future purchase to customers who have to pay for a return. INTERNATIONAL The world is your market: Figuring out how to sell and ship to anyone, anywhere, is your challenge. Start here: Choose your best market – Many growing merchants target the U.S. first based on shopper similarity and proximity, yet other markets like Europe and Asia may make more sense for your product mix. Understand payment preferences – In North America and much of Europe, credit cards are the norm, but that’s not the case in China, for example. Research regulations – You’ll have to comply with the destination country’s requirements for documen- tation so the item clears customs. Remember details – When you fill out customs forms, details can help get the item cleared quickly; a lack of details can result in a delay that disappoints your customer. For more on international shipping and how Canada Post can help, see Southern exposure, page 24. Canada Post has a team of ­e-commerce experts ready to talk through your e-commerce ­operational challenges and how to overcome them. Visit canadapost.ca/expertguidance to get in touch. Want more tips and ­resources on how to ­operate your e-commerce business? Download our full e-book at canadapost.ca/masterecommerce. Mastering your e-commerce operations How to optimize every stage of your workflow – and satisfy customers How Canada Post can help
  12. 12. 22 canadapost.ca right customers for your business. We want retailers to leave the workshop feeling energized, inspired and newly equipped to tackle challenges and seize opportunities. We want to enable start-ups to become successful small businesses; small businesses that will become medium-sized – and maybe even the next retail giants. As part of our long-standing commitment to enable businesses across Canada, our support for the GROW participants will not end with the workshops – we will provide you access to content, tools and resources that will support your business growth. We’re here to help, from coast to coast to coast. DTOW 22 canadapost.ca For small- and medium-sized businesses, trying to make it in e-commerce is both exciting and daunting. While retailers know there are various tools and resources out there to help them succeed in the omni-channel world, navigating through them and finding the precise ones that can help them is anything but easy. We hear this every day from the businesses we support – and that’s why we’re launching the Canada Post GROW program. GROW is a new workshop-style conference that equips retailers with the tools and knowledge they need to more effectively operate, grow and scale their businesses. We want to help retailers create an experience beyond shopping so they can connect with Canadians through a brand experience – an experience that is accessible and that creates a strong presence. Canada Post is hosting GROW events in 10 cities across Canada. Stops in 2018 include Kitchener-­ Waterloo, Barrie, Vancouver, Edmon- ton, Québec, Montréal, Halifax, Toronto, Yellowknife and St. John’s. Attendees will hear from industry experts as well as successful retailers, and can take advantage of valuable opportunities to expand their networks. Our goal is to provide actionable insights into industry trends, shopper preferences, shipping tools and marketing strategies and to ensure that retailers understand how to apply this knowledge to their unique businesses as they grow. Through presentations and breakout sessions, GROW work- shops will delve into some of the most challenging and complex issues businesses face. Depending on the audience, topics can cover e-commerce operation basics and how to stream- line the e-commerce workflow to improve efficiency; tips on order management and marketplaces; key metrics retailers should know and track; returns and how to craft a policy that’s a win-win for you and your customers; selling beyond Canada’s borders; growing your customer base through customer acquisition strategies, including enhancing digital channels with direct mail, as well as identifying the Helping you get bigger – and better YOUR BUSINESS from local to beyond CANADA POST NEWS Visit canadapost.ca/GROW2018 to register or learn more. YOU COULD WIN UP TO $100,000 IN SHIPPING CREDITS canadapost.ca/ecommerceawards IMAGINE WHAT YOU COULD DO FOR YOUR BUSINESS APPLY TODAY! The deadline to apply is Wednesday, May 30, 2018. This year’s awards will be held at the Royal York Hotel in Toronto on September 20, 2018.
  13. 13. Structube is a family business, based in Montréal, that has been offering contemporary home furniture since 1974. While it now operates more than 55 stores across the country, many Canadians have yet to experience the quality and value Structube has to offer. A flyer in their mailbox is changing that. “Our company had marketed exclusively through digital channels for about three years before return- ing to flyers,” says Tony Trew, Marketing and E-commerce Director at Structube. This time around, though, the company has decided to get back into flyers in a much bigger way – literally. Innovative format, big impact An 8” x 10” format allows ­Structube’s catalogue to stand out in a consumer’s mailbox. “We’re using income targeting and Canada Post geo- graphical data within a radius around our locations. This ­contributes to driving more traffic in-store,” Trew explains. “One of the things we like about Canada Post is that apart from getting us into condo buildings, which are one of our big client segments, they also get our flyers into each resident’s mailbox – they don’t just throw them on the lobby floor.” An influx of more qualified customers Integrating physical marketing also improved the return on investment of Structube’s digital marketing spend. Store managers have told Trew the flyers are not only driving customers to their ­ Structube locations, but also contain information that they can discuss. “When the customer comes with the flyer, they talk about specific products they noticed, so we end up with a more qualified customer in our stores,” says Trew. The flyer was also a good reminder for shoppers to return to the retailer’s website. “The results have been ­over- ­whelmingly positive. An integrated marketing mix works, and Canada Post Neighbourhood Mail™ is a great solution for our brand.” DTOW Delivering the Online World24 canadapost.ca 25Spring 2018Delivering the Online World 25 CANADA POST NEWSCANADA POST NEWS Southern exposure Sources: 1. Statista. Number of digital shoppers in the United States from 2016 to 2021, 2018. 2. eMarketer. Cross-Border e-Commerce 2018 – A country-by-country comparison, March 2018. 3. Internet Retailer. U.S. shoppers, lured by the loonie, flock to Canadian e-commerce sites, March 2016. Structube optimizes its marketing with a bold flyer A targeted direct mail campaign drives in-store visits and better return on investment of digital marketing. See how Neighbourhood Mail™ can help you at canadapost.ca/neighbourhoodmail. 1. Canada Post, Catalogue Shelf-Life Omnibus, 2014 The catalogue effect • Up to 70% lift in-store traffic • Improved ROI of digital marketing If growth is your goal, you can’t ignore the U.S. Canada Post makes it easy and affordable to access that lucrative market. Canadian retailers looking to expand their business don’t always consider crossing the border, but they should. For e-commerce businesses, our closest neighbour to the south represents a significant growth opportunity. In 2017, more than 215 million Americans shopped online.1 Nearly 53 million of them were cross-­ border shoppers. They explored international markets in search of better prices and they found them here: 13% of U.S. cross-border shoppers bought from Canadian retailers last year.2 The U.S. dollar is strong against ours, so Canadian purchases are often a good deal; and in many cases, we sell items that U.S. shoppers can’t get at home. Many retailers recognize the ­opportunity and want to enter the U.S. market, but they don’t know where to start. The right partner can help with the entire process, end-to-end. Canada Post’s U.S.-bound shipping service makes shipping to the U.S. easy, quick and affordable. Here’s how you benefit: • Our service lets you integrate customs declaration forms with shipping labels, which simplifies the declaration process. • With delivery times ranging from next day to five days, our options let you create a shipping strategy that serves your customers. • We can help you drive repeat business by providing U.S. customers with the same great delivery experience as your domestic customers. • The “what you see is what you pay” pricing means there are no surprise costs. You won’t be charged extra for residential delivery, address corrections or extended delivery areas. • Pricing is in Canadian dollars (so no need to worry about currency fluctuations), and you can get up to 60% off the regular post office rate on our most popular U.S. service options. DTOW U.S. online shoppers spent $3.2 billion on products from Canadian web sites in 2015.3 To learn more about U.S.-bound shipping and expanding your business internationally, visit canadapost.ca/crossbordersolutions. Sustained brand awareness: 40% of Canadians hold on to catalogues for longer than a month.1
  14. 14. Mary Cochrane is Director of Enterprise Marketing at Canada Post. She sits down with DTOW to talk about direct mail – its advantages, ­surprises and the reason millennials can’t get enough of it. 26 canadapost.ca 1. There’s a rumour going around that DM is making a comeback – why is that? Because retailers are becoming increasingly frustrated with the digital space. There’s no doubt that digital is a valuable channel, but it has become so crowded that it’s harder to get heard. Companies that are starting to incorporate direct mail into their mix are taking advantage of an uncluttered space, where they don’t have to compete for attention. 2. Still, the perception of DM is that it’s old fashioned. People tend to forget the power of offline. Mail in its physical state has the ability to evoke emotions – it’s tangible and more intimate. What that means is that you can get people to act. Whether that’s getting them to take a picture of the DM and put it up on Instagram or head to your website with a discount code or visit your new pop-up shop around the corner. DM just ­resonates more with customers. 3. What’s in it for online retailers? For an e-commerce store, the fundamentals are all online and so often e-retailers think they need to stay in the digital space – but that’s not the case. You can surprise and delight your customers with some- thing physical, like a thank you card. But also as soon as you ship to a customer, you have their postal code. That enables you to target lookalike audiences and grow your customer base. 4. You’ve done research about millennials and DM – what did you find? Millennials love direct mail. They love analog. They gravitate towards experiences. This generation has grown up on digital and so it’s exciting for them to get direct mail, because they so rarely do. It’s a huge missed opportunity for companies if they’re not including a physical channel to reach their millennial customers. 5. What surprises retailers the most when they learn about DM? A few things. The level of influence that mail has in the home – the fact that DM is opened, read, shared, kept and displayed. It can persist in the home for up to 17 days, which is pretty significant. Also its ­intelligence – how precisely you can target your audience. And I would add that it’s not a standalone channel. You can integrate direct mail into your campaigns so it complements your digital ads. A lot of companies don’t realize how easily they can do that, and how effective it is. 6. What’s the future of this channel? It’s going to get even more creative and innovative, especially with new print technologies. I think we’re going to see the pendulum continue to swing back toward more offline experiences. There is a continued focus on e-commerce business and optimizing the customer experience, and because of that we’ll see greater integration between mobile and physical mail. We will also see improved channel attribution as our data opportunities become more sophisticated. Awith Mary CochraneQ To see how innovative companies around the world are using direct mail, visit Incite magazine at canadapost.ca/incite.

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