Parcel Lab is a global post-purchase software provider that aims to enable brands to increase top-line revenue, decrease operational cost, and optimize customer experience.
The enterprise counts over 700 brands including Ikea, Chico's, H&M, and Yeti, and operates across 175 countries and track shipping data from more than 350 carriers worldwide.
Since 2018, the company has been analyzing the post-purchase experience of online stores annually by ordering from 100 stores and evaluated how shipping, shipping communication, delivery, and returns processing was handled.
As part of a recent study, it analysed the online stores of 50 DTC brands and 50 corporate brands that are popular in the DACH countries and compared their respective strengths and weaknesses.
Among the surveyed sample the brands from the fashion segment include corporate brands such as Giesswein, Hugo Boss, Lala Berlin, MCM, Tag Heuer, Tamaris, Tiffany, Tommy Hilfiger and DTC brands including Armed Angels, Distorted People, Got Bag, Horizn, Oceans Apart, Paul Hewitt, and Sassy Classy.
Contrary to expectations, a main result that emerges is that in terms of delivery service traditional brands perform best as, for instance, 80% of corporate brands offer free returns, less than 50% of DTC brands do.
One out of five corporate brands offers free shipping, and around eight out of ten traditional brands also take back returns free of charge. Some brands are getting quite creative here: one corporate brand had placed the explanation of how returns work very attractively on the packaging itself. This saves an additional package insert and makes it easy for the customer.
When it comes to returns, the DTC brands are much less customer-oriented. Here, only one out of ten companies generally offers free shipping, and more than half also make their customers pay for return shipping costs. One DTC brand charged shipping costs of €2.99 for the order, contrary to the information on the website, and did not include the returns slip promised on the website with the package.
Traditional brands also outperformed their young challengers in terms of delivery time: 46% of the established brands managed to deliver the order within two working days. Of the digital brands, only one among five managed this. In addition, the corporate brands also take their customers by the hand better in the event of returns.
While more than one in three DTC brands leave it entirely up to their customers to return unwanted products to them, only 10% of corporate brands do so. The rest either enclose return labels, offer online return portals, or at least refer customers to their customer service.
There are also criteria in which the D2C brands scored better than the established manufacturers. For example, the proportion of brands offering sustainable delivery options is twice as high among DTC brands as among corporate brands, at 25%.
While 60% of the young digital brands use sustainable parcel packaging, only 48% of the corporate brands do. The young brands also put more effort into packaging design than the established brands. Out of the total, 70% of DTC brands ship their goods in branded boxes. For corporate brands, the figure is only 36%.
In terms of delivery reliability, both representatives of their classes are at similar levels: 36% of orders arrived later than announced in each case. Here it pays off that the DTC brands communicate more transparently about the current order status than the corporate brands. Whereas one in two of the latter does not hear anything more after confirmation of dispatch, seven out of ten DTC brands still send messages when the goods are about to be delivered.
And the winner is…
"The D2C brands are bolder than the corporate brands when it comes to passing on their delivery and return costs to the end customer," commented Anton Eder, co-founder, Parcel Lab summarizing the study’s key findings. "And the customer seems to accept it, otherwise the young entrepreneurs would see significantly worse conversion rates than usual in their data,” he added.
In some places, however, the customer experience of brand stores is reminiscent, for instance, of an engine hood polished to a high shine, yet with oil dripping here and there. "The shipping packaging may be nicely designed, but if a customer has to wait a week for a response from customer service before they can return their package, the brand image is tarnished."
Furthermore, it does not seem customer-oriented if brands do not hear from them after the order and shipping confirmation - or if there is no customer account or one that is very well hidden. This also happened once with the DTC brands.
Summing up, both parties, DTC brands and corporate brands, can also learn from each other in different areas. So that the phase after the purchase really becomes an experience.