Think inside the box

Starting out with e-commerce? Our retail guru Catherine Erdly wraps up some important P&P issues.

Postage and packaging is an issue that you don’t really have to grapple with until you have to do it yourself. Let’s assume you are a retailer trying to keep your online sales personal.

Receiving an item might be the first experience a customer will have with your products, so ensuring that you make a good first impression is almost as important as the product itself. This is a ‘nuts and bolts’ topic but one that’s critical to your customers’ experience.

Packaging and the importance of the ‘unboxing experience’ work simultaneously together, but you also have to test the safety and security of your packaging options and ensure those materials aren’t undercutting your profits.

Postage and packaging has shifted over the last few years – maybe three or four years ago this experience that your customer was going to have, how they felt, what it looked like, was the priority. Although these days the customer still wants a nice experience, the perception of packaging has shifted and people will now contact you to complain about excess packaging or packaging that can’t be recycled.

Increasing conscious consumerism and passionate shoppers who are serious about reducing waste has shifted retailers’ decisions around packaging when posting products.

No breakages

First and foremost, your packaging’s job is to make sure that the product gets to your customer in a perfect condition. The best way to test this is to post items to yourself! If you’re packing items yourself, make sure there’s no movement! If your products are packaged carefully and tightly then they are less likely to break in transit.

Think carefully about the kind of packaging materials that you're going to use. How are you going to make sure that they are keeping your product safe and minimising the risk of breakages?

Time & materials

How long does each postal order take you to package up? You’ve wrapped it in tissue paper, put twine around it and a placed a sticker, then you’ve put it inside a bag maybe with a handwritten note, and then you put that in an envelope. How long has that taken you and how much has the packaging cost?

It's so important that you make sure you cost up exactly how much you're spending on any packaging. Sometimes there is no need to have custom-printed tissue paper produced or really fancy boxes with magnetic closures as it eats into your profits.

Think about ways that you can create a decent experience for your customers and yet not be spending a huge amount of time and money on packaging. Don’t forget to pop a business card inside or some information about your business to encourage further orders. You can also incentivise – for example, you could encourage a review on your website with a discount on their next order.

Obviously as your online business grows and your orders increase, the time spent on packing orders becomes a larger part of your daily business activity. You’ll have less time so you may need to outsource, and you should be reviewing these things regularly to find what works for you.

Remember, you can have multiple concepts for packaging and you can charge for it. Don't feel like you have to offer a beautiful gift option and not charge for it – those customers that want to send an extra special gift will pay for more expensive packaging or gift wrapping.

Postage

Postal prices can vary dramatically so this is another cost you need to factor in. Can you afford to offer free postage?

Free postage generally leads to a better conversion rate and it’s normal for online retailers such as Not On The High Street or Etsy to push towards offering free postage. The number one reason for an abandoned cart is because of an unexpected postage charge, or a postage charge being too high. People would rather spend £28 on an item than £25 plus £3 shipping, which seems completely nonsensical but research has shown that additional postage can be a psychological barrier to spending!

If you’re unable to build postage into the cost of a product and therefore can’t offer free postage, think about a smart postage limit. So, for example, if you know that your average order value is £36, set your free postage limit at £40, just slightly up from your average order value. If you put it around 10% higher than your average order value, then it gives customers an incentive to add one extra item to their cart to push their total over the free postage limit.

Overseas sales

Currently you’ll find most retailers, especially in the UK, have some information on their websites about shipping challenges overseas. If you're somebody who only takes a very small proportion of your sales from overseas, you may want to consider turning off that option for now, until we all get a better sense of what's going on.

Another way to under-promise and over-deliver could be by adding a note about your delivery times being longer than they normally are just to give you a bit of breathing space. Then when the item arrives before you said it would you’ll have a happy customer!

Distance gifting

In the last 12 months, distance gifting has been a huge driver of sales for lots of small businesses. People are away from the ones they love and they want to be able to send them items to let them know that they're thinking about them. So make it really clear that your customers can send a gift to somebody – make sure you tell your customers you can dispatch to another address and now that you’ve built their confidence with your packaging, for example products wrapped in tissue with a nice sticker and a handwritten note, you’re offering something that’s perfect for most people when they want to send a gift.

Catherine is a small business retail expert, a Forbes.com contributor, a judge for the Good Retail Awards, is on the Editorial Board of Modern Retail, has featured as an expert commenter in national newspapers, and has been a speaker at various trade shows and industry-led events across the country. Join her at The Resilient Retail Club (resilientretailclub.com).