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AfterShip makes the post-purchase a customer connection point
The software company provides solutions for shipment tracking, returns and more.
A sale isn’t completed until an item gets to a customer’s door. After all, a lot can happen in the miles a product travels in between. And even after it arrives, there are reviews, returns and hopefully the next purchase for a brand or retailer to consider.
It all means that, when it comes to building trust with customers, the post-purchase experience is just as important as what happens before a customer clicks “Buy.”
That post-purchase experience is the base from which AfterShip has been building solutions for more than a decade. The company currently works with more than 14,000 merchants, including brands like Harrys, TOMs, GoPro, and Kylie Cosmetics.
AfterShip started by helping brands and retailers gain visibility and efficiency on the path between the distribution point and the carrier. Founded in 2012, the company launched with a shipment tracking API solution. At this point, it was involved in label generation and creating tools that allowed retailers to onboard multiple carriers from a single interface. Alongside a predicted delivery date API, this offering remains a core focus today. With integrations with more than 1,030 carriers, it is used by platforms such as Amazon, Etsy, eBay and Google.
Today, AfterShip has 440 employees across seven offices, including a U.S. headquarters in Austin.
More recently, AfterShip has built out solutions that allow merchants to add visibility and new capabilities to the post-purchase experience for their customers. These include automated shipment notifications, logistics visibility dashboards, branded tracking pages and automated returns.
These features are designed to provide the latest information on where a package is, and when it will arrive. For instance, AfterShip customers can provide SMS notifications if a package is delayed. Such tools also serve as an additional touchpoint for customers. A branded tracking page can include item listings, bringing the potential for a check-in on an already-purchased item to result in another sale.
It all points toward allowing any merchant to deliver an “Amazon-like” experience, Joe Wyatt, head of digital solutions at AfterShip told The Current from the floor of the NRF Big Show 2023.
“We break down the barriers for any merchant to do that, from the smallest to the largest,” Wyatt said.
Looking ahead, Wyatt sees returns becoming a much more important focus. The combination of ecommerce growth and generous policies is leading returns to come in at unprecedented levels.
On one hand, returns are necessary at this point. Studies show that 60% of customers read return policies before shopping. On the other hand, sending already-purchased items back is leading to challenges in the supply chain. Those generous policies have led to a whole new set of behaviors that can generate waste. In one, called bracketing, consumers buy the same item in a number of sizes and colors, then keep only the one they like.
Given this dynamic, merchants are looking to create more return options to serve customers and cut down on logistics costs.
This is ushering in a new wave of solutions, such as return bars where items can be quickly dropped off in-person, or post-purchase options that rout consumers toward exchanges. AfterShip launched a new suite, called Returns Center, that allows brands and retailers to implement these capabilities.
It's a sign of how the company continues to build after a decade. As the post-purchase continues to gain importance, AfterShip aims to add tools to help brands and retailers deliver for customers.
Trending in Operations
Target plans to expand retail media, delivery hubs in 2023
With same-day services accounting for half of Target's digital sales, the retailer is adding drive-up returns.
Following the pandemic ecommerce boom, Target is a more digitally-oriented business. Yet the retailer is keeping stores at the center of its overall strategy.
In 2023, Target's growth plans involve boosting retail media, as well as delivery capabilities through new supply chain hubs, executives said on an earnings call this week. But the retailer continues to see stores as the center of the operations that move goods to customers, with the vast majority of orders being routed through the brick-and-mortar locations.
Target’s digital business nearly tripled in size over the last three years, as the retailer was among the big winners of the pandemic-era combination of demand for goods and increased digital adoption. With the return to in-person shopping, annual growth of digital comp sales slowed down to 1.5% for the 12 months ended January 2023, from 20.8% in 2021. Yet Target isn’t pulling back on expansion to existing digital capabilities and the introduction of new services that became a hallmark of the pandemic.
On the call, executives outlined a few of the ways the retailer is investing in the shopping experience and logistics:
Digital experience: Retail media and loyalty
For Target, digital sales now represent 19% of the business.
This is the result of concerted expansion over the last several years. More customers shifted to digital during the pandemic, and Target built up ecommerce capabilities to serve them.
“A strong digital shopping experience is every bit as important as the one we create in our stores,” said Chief Growth Officer Christina Hennington. “So, we've been investing to ensure that the experience is seamless across every channel, regardless of how our guests shop.”
Target has made upgrades to the digital shopping experience, boosting discovery capabilities as customers both search and browsing for new products. It is using data and insights from consumers to provide personalized content such as customized homepages and improved search.
This is powered by a group of key services within Target that are designed to be “greater than the sum of the parts,” Hennington said.
Target operates retail media through the company Roundel. The advertising business has grown 60% over the last two years, executives said. But boosting bookings isn't the only goal. The data made available through media is being harnessed to create a better shopping experience.
“To us, Roundel is more than a digital advertising platform or another revenue source on the P&L,” Hennington said. “The goal is for our guests to have a tailored, relevant experience while helping our vendors reach the guests who are most likely to be interested in their products. Said simply, Roundel makes us better merchants, more consistently serving our guests with the products they want. This is why our approach to digital advertising looks different than others.”
Target’s loyalty program, called Target Circle, is another key driver of the digital experience. It has more than 100 million members, and served three times more personalized offers in 2022 than the year prior. Members of the program spent three times more on average over the holiday season, as well.
Like Roundel, the data and insights from Target Circle are also being put to work to help the retailer improve personalization. This shows up not only in the offers through the program, but also homepages and search noted above.
“Roundel makes for a more deeply engaged guests and partners,” said Target CEO Brian Cornell. “And because it gives us a better understanding of our guests' preferences, it makes us an even better and more profitable retailer. So, we intend to place additional emphasis and advancement toward Circle and Roundel in 2023 given the growth potential they'll unlock."
For Target, the store and ecommerce are operationally linked. That’s most evident in the company’s approach to fulfillment. Following a “stores as hubs” strategy, Cornell said 95% of Target orders – whether digital or in-store – are fulfilled by stores.
So the services that the retailer creates to improve the digital experience have space at the store.
Target had some news on this front Wednesday: It is now offering drive-up returns, enabling guests to drop off an item they want to return, just as they would pick up a purchase. The service started as a pilot, and is now going into wide use.
“Not only is this a huge win for our guests who can now do even more drive-up, but it brings more efficiency to our returns process with more resale opportunities and fewer expenses for mail and returns,” said COO John Mulligan. “We're combining the strength of our digital self-service returns process with our industry-leading drive-up experience to meet our guests where they are.”
It underscores the importance of same-day services for Target, which provide customers with the ability to order online and receive an item later that day. These services grew 7% in 2022, and now represent over half of digital sales. They account for 10% of Target’s total sales. Along with curbside, Target also offers same-day delivery through its company Shipt, as well as in-store pickup.
Behind the scenes, Target is also making improvements designed to bring down the cost of packing and delivering digital orders. The average fulfillment cost per unit decreased 40% over the past four years, even as same-day services grew.
Target is expanding its supply chain network beyond stores to realize new efficiency. Earlier this month, it announced plans to invest $100 million to build new sortation centers, which are key to two-day and same-day shipping. It currently has nine such centers, and is planning to have 15 in place by 2026.
It’s a move to invest in future growth that will likely lead to more cities realizing faster service.
“If you look forward..we think there's hundreds of million dollars to continue to unlock with our investment in sortation centers,” said Mike O’Neill, Target’s SVP of financial planning and analysis. “That's a capability that's been our on roadmap for a few years now, but requires scale and density at the market level to unlock, and given the growth over the last three years, we now have that. And so, we think there's opportunity in dozens of metro markets.”