Unboxing Toms: Shopping Online to Learn from Your Competitors
July 14, 2016 6 min read
Building an e-commerce brand requires that you manage inventory, store management, product management, make display decisions, create a marketing strategy, work with social media, and handle warehouse management. At the end of that, after the customer has clicked ‘purchase’, you have to handle packaging and fulfillment. And, with all of the work that goes into reaching and engaging with consumers to create customers, it is crucial that you make the right decisions when shipping and distributing packages because it affects their experience, your brand, and your overhead. While this part of the e-commerce sales process is extremely important, even major companies make mistakes that cost them customers.
In our Unboxing series, we order from top companies around the web, so we can tell you what they did right and what they did wrong, so you can learn from them and hopefully make the best decisions for your own business. In this Unboxing blog, we've ordered from Toms, a web shop famous for their shoes.
How Was It Shipped? - Grade C
Shipping is incredibly important for a few reasons. First, and foremost, for any e-commerce business, shipping is an expense. Not only do you have to worry about how much you are spending on shipping itself but also how much you're spending on packaging. In fact, packaging accounts for 5-15% of your total shipping costs.
How did Toms do? Not so good. Toms shipped our order in a large, blank cardboard box using UPS Ground, one of the more expensive options for shipping in the USA, or anywhere for that matter. Cardboard boxes are difficult to avoid for shoes, and do give a more premium look, especially when customized, but they are heavy, bulky, and expensive to ship. Toms could likely cut costs by shipping their shoe boxes inside of branded plastic or paper envelopes, which would reduce packaging costs and the weight of the package.
Toms also failed to customize or brand the exterior of the box in any way, so we're left waiting to get an impression of the brand until we open it up. While branding the box isn't necessary, printing a box has minimal impact on the cost of packaging. Dotcom Distribution also found that consumers are more likely to share a product delivery on social media if it comes in a custom package, and are actually more likely to make another purchase from the brand.
Shipping Labels – Grade B
Shipping labels can reveal a lot about a brand, their shipping methods, and how much they're spending on postage. For example, we can see that Toms uses UPS tracked shipping. This is nice for consumers who want to know where their package is at and who want a more premium delivery experience than USPS. However, it is also more expensive than USPS, especially for a brand that offers free shipping on orders over $55, and that offers free return shipping.
A quick look at the shipping label on our box will also tell us a few more things about how Toms is handling fulfilment. For example, the address:
11905 Landon Drive
Mira Loma, CA 91752
With a small amount of digging, you can find that this address belongs to IDS Logistics, a company that provides supply chain execution, international delivery, and a variety of logistic services such as track and trace, warehousing and distribution, and a worldwide express courier service.
This is actually a smart move on the part of Toms. By choosing a 3PL (third party logistics), they can cut costs by shipping Toms products closer to the delivery location before handing them over to UPS, and likely reduce costs for the brand by handling packaging and fulfilment all in once place. They also use their 3PL to print out and send return shipping labels that aren't charged to their account until used. This is a very valuable service, especially for ensuring customer satisfaction. Policies like this also attract people who shop more. Zappos found that consumers who return more products earn the company more money.
What could they have done better? Zappos could cut costs by switching to USPS, which also offers tracked shipping, and using EVS (Electronic Verification System) to save money on ordering shipping labels. They could also make the switch without changing any of their existing services.
What's in the Box? - Grade B
Opening up a box from an e-commerce store should be equivalent to walking into that brand's physical store, because it is. Unboxing has to deliver on the product and the brand promise to leave a lasting impression. Unfortunately for Tom's, we weren't very impressed.
Inside of the box, we found a Tom's shoebox, a return label, and a card that reads 'Toms'. The shoe box is minimally branded, the shoes were packed into the box with no tissue paper, and that was it.
Toms also did a few things right. They did brand their shoebox, and they printed a reminder that for every pair of Toms you purchase, they give one away to children in need. That's a big deal for marketing as well as philanthropy, because it reminds consumers that they did something good by making the purchase.
Overall, the product unboxing is a little bland, so the shoes are definitely the highlight. In the future, Toms could improve by making the interior packaging look a little nicer.
Promotional Efforts – Grade D
The interior of a package is your best chance to connect to consumers with reminders, offers, and branded information. You can consider it as some of your most valuable retail marketing space. Toms missed the memo. Except for the branding on their shoebox and the return label, there isn't anything at all inside of this box. You do get the Toms card, but that's about it.
What could Toms have improved? For starters, Toms sells multiple complementary products for their shoes. Promotional efforts like small discount coupon for a follow up order, a brochure with sunglasses or even more shoes, or a hashtag to share on Instagram or Facebook with the new shoes could have a big impact for a brand like Toms, but they are missing the opportunity.
Conclusion – Grade C
While Toms gets several things right, including using a 3PL and providing free return shipping, they do have several areas where they could improve. Toms could cut costs by switching to USPS, using EVS, and switching to branded plastic or paper packaging. They could also improve their branding and promotional efforts inside and outside of the box to create a more lasting customer impression, and to drive existing customers back to their site.
Thank you for taking the time to read this Unboxing post. Hopefully you've gained some insight into your own shipping and distribution process and can take away something that adds value to your brand.
Disclaimer: This post does not create any sense of association between Skubana and Toms, and is not sponsored or endorsed by the company.
Skubana's software allows you to automate orders between the shopping cart and the marketplace, print custom shipping labels, and optimize your inventory to cut costs and streamline operations. Our software also integrates directly with low-cost 3PL providers in the USA, so your inventory management makes sense. Contact us for more information, or for a free demonstration.
Written By Chad Rubin
Chad Rubin is the co-founder and chief executive officer of Skubana, a multichannel e-commerce software the enables brands to unlock growth by unifying their back-office operations.