Map of US and Importance of Dynamic Fulfillment Network

With the unexpected onset of COVID-19, many brands and manufacturers faced a production standstill ranging from weeks to months, jeopardizing and even killing their businesses. The coronavirus restricted supply chains, exposed structural fragility, and revealed a severe lack of emergency resources. In short, many companies just weren’t prepared. Even now, many states are not yet back to business-as-usual.

The impact on supply chains and fulfillment was one of the most pervasive and damaging effects inflicted on businesses. To safeguard against this in the future, brands and sellers alike have been exploring new fulfillment options.

At Kaspien, we’ve spent the last 12 years working with brands of every level, size, location, and structure as a third-party retailer. During that time, we’ve created a robust fulfillment network. From a small processing area in the back of our corporate office to now utilizing 7 fulfillment centers across the United States, we’ve built an efficient and resilient fulfillment network that has protected our partners’ businesses.

In this post, we’ll outline some of the key benefits of and advice for expanding your fulfillment network.

3 Benefits of a Dynamic Fulfillment Network

1) Mitigates Geographic Risks

If we’ve learned anything over the past few years, it’s that the world is unpredictable. Our partners are in every corner of the country, and as such, there are many different environmental and situational obstacles that can impact product fulfillment.

Whether it’s wildfires, hurricanes, or a pandemic, any business is subject to interruption when catastrophes arise. The West Coast Port Strikes of 2015 was one of those situations for us; we didn’t see it coming, and the sudden inability to process imported goods through west coast ports certainly impacted our normal business functions, and many of our partners faced similar issues. Lead times lengthened and we faced out of stocks.

The port strikes showed us that we needed fulfillment centers on the east coast in order to protect our and our partners’ businesses. Now that we have fulfillment and processing centers around the country, including both coasts, we can minimize the impact of geographically constrained events.

2) Lead Time and Freight Cost Improvements

Many manufacturers are facing tighter margins these days, as well as an added sense of urgency to have shipments turned around to Amazon quickly. By diversifying and growing our fulfillment network, we’ve seen a favorable upswing in lead time and freight cost.

According to Kaspien’s Strategic Warehouse Director, Jeff Bernatz, “In 2020, we’ve seen a ~20% decrease in overall turnaround time at our warehouses, directly tied to the increase in available locations and available staff to handle the workload.”

We work with many manufacturers who do not have the capacity or expertise to complete product preparation in compliance with Amazon’s fulfillment center requirements. For them, shipping to one of our processing facilities is essential, and that could translate to longer lead times and higher shipping costs. But, because we have a large fulfillment network, there’s always a processing facility close by, no matter where our partners are shipping from in the US. As a result, our partners pay a lower freight cost and shorter lead times since they’re shipping shorter distances.

For brands seeking to partner with retailers and/or logistics providers, always ask about their fulfillment network. A larger network will position you to get better margins and run a more efficient sales channel.

3) Handle Higher Volumes and Scale

A large fulfillment channel always enables us and our partners to scale faster, pushing more products at a higher rate. “Since expanding to 7+ warehouses, total unit volume through our warehouses has increased ~15% vs the same time YTD period in 2019,” said Bernatz.

More locations and a higher staffing capacity have allowed us to process more orders in less time. With this added capacity, we have room to expand into previously infeasible programs, such as direct to consumer fulfillment, distribution, etc. It also eliminates the backlog we can sometimes see during peak sales seasons, such as Q4 and summer.

The Benefits will Outlast COVID-19

For many companies, this pandemic has highlighted the extraordinary value of a diversified fulfillment channel. However, all the aforementioned benefits of a large fulfillment network will continue even after the pandemic ends. Though the coronavirus may have prompted you to explore new fulfillment options, it’s worth continuing that research so you can position your brand to weather future storms and continuing growing.

We’re always happy to share our learnings from the past 12 years. If you want to learn more or discuss a partnership, get in touch through our contact form or schedule a call with one of our ecommerce experts.

ecommerce experts discuss the coronavirus

Continuing our focus on looking for the helpers during the pain and uncertainty so many are feeling right now, we’re dedicating this blog post to some of the biggest helpers at Kaspien: leaders by title and action who are helping Kaspien and our partners navigate through the immediate and long-term impact of the coronavirus.  

This expert spotlight features five Kaspien leaders: 

  • Bryce Burchak, Director of Strategic Initiatives 
  • Keri Rhodes, Director of Marketing 
  • Darby Meegan, Director of Business Intelligence & Product Management 
  • Kelsey Gruis, General Manager of Subscriptions 
  • Jed Nelsen, Senior Compliance Manager 

We asked these leaders 5 questions about how they’ve been affected by and responded to the coronavirus.  

Learn more about how Kaspien is supporting brands during the coronavirus in our COVID-19 Status Update.

1. How has your team’s work been impacted and how have you adapted? 

Bryce Burchak (Strategic Initiatives): To be honest, the biggest change we’ve seen is moving to work from home. My team works closely with our internal departments to accomplish our objectives on time. With our primary objective being to maximize the growth of our partners brands, our work has not changed. We have some different strategies to maximize that growth with the new COVID landscape, but we are still, just as always, focused on identifying and executing tailored solutions for each of our partners to grow their brand 

Keri Rhodes (Marketing)COVID-19 has forced us to change our marketing calendar and strategy. Instead of running B2B marketing for tradeshows, spring, and back-to-school, we’ve had to adapt and respond to the coronavirus. We’ve worked with our local and state government to coordinate support for impacted businesses, created new discounts and offers to make accessing tools and services easier for impacted brands, and worked with our supply network to direct PPE equipment to several hospitals. 

Darby Meegan (Product Management): We’re now all working remote. The team has had to suddenly become thoughtful about how we do work in a new way – a strange thought, and frankly, something I’ve taken a bit for granted. The team has been super malleable: we’re video chatting more, finding new methods to collaborate and communicate both synchronously and asynchronously, and communicating progress twice as often. The most evident win is that our team understands the vision and show ownership outside of the normal work structure we’re all used to working in. 

Funnily enough, several team members have made comments about there not being a good substitute for whiteboards when we’re problem solving as a team – a problem we’ll need to solve as we see our team working more and more remote into the future, not just because of this pandemic. 

Kelsey Gruis (Subscriptions): Rightfully so, our partners look to us to be the experts on marketplaces. With the uncertainty and turbulent landscape caused by the COVID-19 crisisour brands are concerned about sustainability. While our need to support brands by being the marketplace experts hasn’t changed, I would say the magnitude of marketplace changes has. We’re working really hard to gather answers as fast as we can, and subsequently, adapt as fast as we can. We want to do anything we can to ease our partners minds and give them the breathing room to focus on other priorities. 

Jed Nelsen (Compliance): COVID-related product restrictions have surged as Amazon unleashed its algorithms to address bad actors. We saw a 5x increase in the number of products restricted. Some of these suspensions were clearly wrong (we saw certain Funko Dolls restricted for having masks on their faces but not being in the HPC category). Our Compliance Team consolidated all the restrictions, prioritized by listings with inventory, and created cases to reinstate products. We had about one week of crazy, but we are beginning to beat the wave back. 

  

2. What are your top priorities to help Kaspien and our partners get through COVID? 

Bryce Burchak (Strategic Initiatives): Safety, sustainability, and supply chain, in that order. 

It’s important that all of us work to address this situation as safely as possible, and we want to model that for our partners. In doing so, there may be some risks to normal business: most notably, managing an effective supply chain.  

Obviously, Amazon has taken some large internal safety measures, and restricted the flow of some products to their fulfillment centers. In addition, some of our partners have shut down their facilities to protect their employees. Given the distribution network that Kaspien has established over our 12+ years, we have multiple means to deliver our partners’ products to their customers. If companies can no longer handle logistics or product prepping, we have a safe and effective means of handling that for them. Of course, not all products are the same, so we are working closely with brands to discuss how we can accomplish this in the most sustainable manner for their business.  

Bottom line: We’re here for our partners, and we are working extremely hard to leverage our supply chain to mitigate COVID impact in the safest way possible.   

Keri Rhodes (Marketing): The health and safety of our team members, and our unwavering focus on supporting brands through these volatile times. Many brands are being forced to change strategy due to COVID-caused economical shifts, and we have the expertise, technology and resources to help them. Marketing has prepared numerous resources that can help brands adapt quickly, and Kaspien has offered discounted rates to ensure brands can protect their bottom line and sustainability over the next few months. The more that brands can automate and trim fat in their businesses right now, the better positioned they will be as the industry evolves 

Darby Meegan (Product Management)Our team’s wellbeing, prioritizing key initiatives, and ensuring we’re all on the same page by over communicating. 

Outside of some of the extreme health impacts of the coronavirus, everyone’s lives have been disrupted. Our coworkers are trying to find work arounds to celebrate weddings, birthdays, new births, and many other things that deserve clinking glasses, tears of joy and hugs. They’re also trying to find work arounds for supporting loved ones, friends who have lost jobs, their favorite gathering places, struggling to make ends meet, or the passing of loved ones. These are events where video chats can’t suffice. First and foremost, we’re making time to pursue human connection and support where we can. 

Now more than ever, our team is ruthlessly prioritizing key initiatives. With the hurricane of potential projects and opportunities to jump on, we’ve paused and tried to measure twice and cut once, then review outcomes. We’ve tried to consistently ask our team, “Are we missing something over here on X? Is this really the most important thing we could be working on? What are we not working on that we should be?” 

Kelsey Gruis (Subscriptions)For our partners, our goal is to mitigate as much of this crisis as we can, so you don’t have to worry so much about your business. Your focus should be on your employees and your families health and safety. We’re here. Our teams are able to work safely and effectively from home, and we’re working to answer your questions and provide solutions. 

Jed Nelsen (Compliance)From a compliance perspective, our aim is to provide good advice to our partners about Amazon’s policies (such as don’t mention COVID-19 or coronavirus in your listing, or it will get restricted) and ensure that their products are live and available on Amazon, Walmart, etc. 

  

3. From your perspective, what actions can brands take that will be most impactful right now? 

Bryce Burchak (Strategic Initiatives): Be creative and get scrappy. There is not one answer for every brand, as each business is unique. The widely applicable recommendation I can offer is to identify the most sustainable supply chain to your end customer. However, focus should not be limited to this. Brands should review the key functions of their business and get creative in how to best address. Take datasupported action quickly; don’t let analysis paralysis stymie your pivot.  

Actions should be prioritized in accordance with estimated impact. If you’re focused on maintaining revenue, that may drive a different action than a cash flow focus. Spend time digging into each supporting process for your top objective and think creatively about how to adjust. For instance, if you’re focused on consistent revenue, have you updated your marketing spend to align with demand trends and increased lead times? You don’t want to create out-of-stocks.  

Keri Rhodes (Marketing)Find ways to scale their current operations in every way, so that they can be nimble and prepared to change as the landscape changes. Brands should be focused on automating and finding the most effective strategies for their advertising, with the goal of increasing sales while cutting costs and time. Brands should also be aware of opportunities to help their bottom line, like recouping as many dollars back from Amazon as possible through tools like Channel Auditor. 

Darby Meegan (Product Management)The highest priority is financial stability for your company and your team members. 

The Paycheck Protection Program loan went live on April 3rd. Iyour brand needs capital to make ends meet (payroll, rent, mortgage, utilities, and other qualifying debts) this is the place to start. Brands are eligible for up to $10MM depending on their circumstances and if they meet criteria. Applications are available on the SBA website. 

Second in my mind is ensuring the safety and wellbeing of their employees. Whatever a company does in a time of crisis either pays dividends or wreaks havoc once things recover. Their response today communicates to their customers and team members the unspoken values the brand holds, it communicates to their retail partners the resilience and longevity the brand holds, and it communicates to their suppliers they’re doing business with a trustworthy partner.  

Third, expand your logistics network – even if only temporarily – to work with providers who can get your goods directly to consumers. Amazon’s supply chain is feeling quite the strain and many experts believe the worst of the virus is yet to come. There are a few options. Deliverr is my recommendation for best directtoconsumer option – they can deliver for Amazon, Walmart, eBay, personal Shopify stores, and beyond. We’ve worked with them for a number of years and value their partnership. Walmart has recently announced their own fulfillment network, which is a great option to get on their rapidly growing marketplace, however, there will be some delays getting up and running in their platform (including an approval process). 

Jed Nelsen (Compliance): Think holistically and longterm. Can you pivot your business to provide needed supplies for the crisis? Are you maximizing your channels that are still selling (grocery, online, etc.)? Finally, be careful not to be opportunistic (price gouging, hoarding, or bragging). If you exploit the crisis to grow your profits, the blow to your brand will be swift and painful. 

  

4. What actions can brands take that will be most impactful in the long-term? 

Bryce Burchak (Strategic Initiatives)This crisis has made many brands realize how overly dependent they’ve become on their Amazon sales. Now is the time for brands to diversify not only their online presence but also their means of distribution. Other marketplaces are working hard to catch up, with some exciting growth coming from Walmart, eBay, Google, and Shopify in the last 6 months, highlights listed below: 

If brands limit their distribution and presence to Amazon, they’ll miss substantial opportunities for exposure, sales, and improved margins on these other marketplaces. This pandemic should be a catalyst for brands to re-assess their ecommerce strategy and work to broaden the number marketplaces they are represented on and explore new fulfillment strategies. 

Keri Rhodes (Marketing): Find a partner that has the ability to work through these types of crises and has the team to support brands when they need to focus on operations and logistics. A holistic partner helps avoid frequent and reactionary changes in strategy, which can cause distraction and derail progress. 

Darby Meegan (Product Management): Same answers as above: safeguard financial stability, protect your employees and reputation, and expand your logistics network. These efforts will help in both the short-term and long-term. 

Kelsey Gruis (Subscriptions): Remember that, while we don’t know when, this will pass. It may take time to get back to ‘normal’, but it will. We must continue to be persistent in our presence and brand values, and that means maintaining a strong presence on your online sales channels. Ignoring your ecommerce strategy at this time would be detrimental in the long-term for two reasons: 1) Ecommerce is the current new norm. If people are shopping, its online. 2) Whenever this does go back to ‘normal’, brands who maintained their footing will be the best positioned to recover the quickest. 

Jed Nelsen (Compliance): Ensure that you have the right partnerships in place to manage your brand, including marketingsupply chain, legal, etc. When times get tough, who is really adding value to your brand? Also, keep an eye on consumer trends, as tastes and buying behavior will change even once the quarantines are lifted. This pandemic will leave a lasting mark on the economy.  

  

5. What skills and traits matter most during this crisis, for a business and/or leaders? 

Bryce Burchak (Strategic Initiatives): Vision and composure. 

This situation has understandably shaken both our current and future world. As leaders, it’s important that you are extremely communicative in navigating your teams through these uncertain times. Ensure everybody is often reminded of the vision you have beyond one day, one week, or one month. It’s important to not lose focus on the end goal with daily news bringing many interruptions.  

That being said, it’s equally important that your vision is inclusive of changes needed to thrive in the postCOVID world.  Now is the time for innovation and adaptability, so if you need to make a pivot, analyze the proposed change, update your vision accordingly, and get the message out ASAP.  

Things are not easy right now. It’s understandable that many are dealing with anxiety and fear as they try to adapt to COVID life. Leaders have the opportunity to address this and set the tone for their business and employees. Maintaining composure is crucial. The top priority should be to protect employees and steer for safety, but do so as a voice of reason and understanding. Don’t get caught up riding the highs or the lows; keep an even-keel and let your teams rely on you to be the calm during the storm. Be the champion of composure for whomever you are leading.  

Keri Rhodes (Marketing): “Find the helpers during tough times.” A great reminder for brands to seek out and provide support within and without their networks. It’s also important for business leaders to remain calm and search for the positives. Events like COVID will make many businesses stronger in the long-run and develop bullet-proof processes that can aid in times of crisis. Businesses and leaders should also be understanding that everyone in the world is being impacted by COVID, so while we are all in this together, people’s lives are being impacted in very different ways. Extending options and being understanding will go a long way for their protecting a business’s most valuable asset: their employees.   

Darby Meegan (Product Management): Vision, teamwork, and ownership. 

Vision cannot be beaten. The legendary Peter Drucker is quoted as saying “culture eats strategy for breakfast.” I totally agree, especially if your culture is built on a vision. Regardless of your position in your organization, what is the why behind what you do? If you and your team have a shared sense of purpose, things go smoother. Here at Kaspien, our vision is to be a brand’s ultimate online growth partner. Every team member here is empowered to put brand’s growth first and advocate for it. That vision of what we’re doing permeates our development team that creates tools for our customers and our internal teams, it enables our data and product teams to innovate and dig into data to create new solutions, it gives our operations team some gumption in positioning our partner’s goods the best way possible, and it ensures our Account Managers and Sales team are true advocates for the brands we work with. If we were just selling goods, I guarantee we wouldn’t approach our work with the ferocity and creativity that we do. Our vision is our true north and the engine behind our competitive edge. 

Teamwork is always paramount in a business and a team. It becomes increasingly so in a period of urgency. Whether you’re a contributor or the leader, empower your teammates to utilize data, map out their approach, communicate their actions transparently, and make decisions. If your team can operate as a collective unit with each member bringing their distinct experience and perspective to the table, you’ll see times of crisis as a chance to reformat and empower your team. Teams need good process, but effective collaboration is even more important. 

Ownership is next. If you can make decisions based on what is the best thing for your customers, you cannot go wrong. You’ll empower those around you. You’ll form partnerships with your vendors, customers, or suppliers. You’ll create momentum and start seeing others rise to the occasion. The bigger impact of ownership, however, is spreads to others. Don’t jump in and take on every project or solve every problem. Trust your team (ahem, see above), and hand over the reins. Teammates, bosses, and coworkers will rise to the occasion and you may be pleasantly surprised about how many key players have been waiting for their opportunity to shine. 

Kelsey Gruis (Subscriptions): Empathy. I think understanding that each person (employee, manager, or customer) handles and deals with things, including crises, differently. My personal belief is that we need to meet people where they are at and acknowledge that how I deal with something is different than how you do – and that’s okay. Customers need to see a brands empathy in that way too. We can’t market a brand/product specifically on how I feel about the crisis; we have to take an even-keeled approach that focuses on sustainability and working together. 

Jed Nelsen (Compliance): Leaders need to be calm, get good insights from the data, and be decisive. Don’t panic; it only makes things worse. Look to what your data is telling you and ask tough questions that get to the heart of the issues. Finally, if decisions need to be made, make them sooner rather than later and commit. 

 

Chat with the Experts 

If you have questions about how your business should be responding to the coronavirus, get in touch with Kaspien’s experts. 

How the coronavirus impacts Amazon sellers

As of publication, the coronavirus outbreak has infected over 75,000 individuals and claimed over 2,000 livesChina has quarantined at least 16 cities19 countries have confirmed cases of the coronavirusand governments around the world have restricted travel and transportation to curb the outbreak. 

The coronavirus has also had an economic impactdisrupting production and supply lines. On February 24th, the Dow Jones was down over 1,000 points, contributing to fears that the coronavirus, if it continues to grow and strain global economies, could trigger a recession.  

Listen to our podcast episode discussing how the coronavirus affects the retail world. 

Factory Production Significantly Slowed 

Quarantines across China have resulted in reduced operations at most factories as laborers stay home to mitigate the risk of infection. In a normal year, January and February see slowed production for Chinese New Year. As such, many brands were prepared for delays. However, the coronavirus has lengthened the pause in manufacturing beyond the normal holiday period 

Delays in production were originally forecasted to be minimal, but China has extended the forecasted delays from two weeks to four weeks, and some factories have alerted brands to expect 6 to 8 weeks before operations are back to 100%. If the delays continue much longer, small and large brands alike will face cascading challenges, from out-of-stock issues to serious revenue losses. There are also concerns that as factories work to meet demand with a limited workforce and heightened time pressure, quality control may be lost. 

Transportation Rerouted and Restricted 

In addition to factories working at low capacities, transportation has also been heavily impacted. Ships have been blocked from ports, required to anchor offshore in quarantine. Airports are shut down, and those that remain operational receive minimal use as brands and suppliers opt to avoid airports in China and neighboring countries. Air cargo out of China is practically non-existent, presenting a significant threat to lean supply chains and retailers who maintain low stock levels. Truck transportation too is affected, as vehicles must pass through multiple checkpoints and reroute around quarantine zones. All of these changes further delay deliveries. 

Unfortunately, the danger to business won’t end with the coronavirus being contained. As companies restart production and play catch up with shipping, there’s a serious risk that transportation could be over-taxed, leading to a shortage as everyone tries to move their goods out of China at the same time. 

Most Vulnerable Amazon Categories: Furniture, Footwear, and Consumer Electronics 

Experts say that the furniture and footwear categories are at the highest risk to be impacted, as many of their products are seasonal. If they cannot receive goods from China in time, they’ll lose peak season sales. Consumer electronics are also an at-risk category, as they source components from numerous countries, largely in Asia. If one component is delayed, the entire production is delayed.  

Amazon Extends Coverage 

In response to the coronavirus outbreak, Amazon has ordered an additional three to four weeks of coverage in key categories. Other major retailers like Walmart and Target have not done the same, and they are expected to be hit harder by the coronavirus outbreak because they source such a high percentage of goods from China and they have not adjusted their inventory schedule since the outbreak. 

Back to School Sales are At-Risk 

The back to school shopping season is a major concern for many brands, as shipments usually ship by end of April. If production is slowed and cannot meet volume in time for the shipment, brands will lose sales.  

Amazon is positioned to benefit from this situation, as they typically see the greatest back to school sales in August and September, when brick and mortar competitors are running low and consumers are short on time. If Walmart’s and Target’s run empty this summer, Amazon’s back to school sales may very well occur earlier.  

WHAT TO DO NEXT 

The coronavirus will have an economic impact. The question is, to what degree? Brands affected by the coronavirus or those that wish to protect themselves from future outbreaks or natural disasters should look into alternate manufacturing partners. Sourcing from a single partner is always a risky tactic, and the coronavirus has made that risk all the more evident.  

Brands can and should also look into shipping directly to Amazon, instead of a US warehouse first. This cuts out an unnecessary middleman and shortens lead times.  

Finally, brands seeking to mitigate future risk should maintain enough inventory on-hand to survive future slow-downs or other inventory complications. It may tie up more cash, but the protective measure serves as an insurance or safeguard against unforeseen challenges.   

Listen to our podcast episode discussing how the coronavirus affects the retail world. 

Over the last 11 years, we’ve developed a wide range of excellent services for our partners, and in the fast-paced world of ecommerce, some partners may have missed a few of those opportunities 

That’s why we’re dedicating this post to providing an overview of Kaspien’s various offerings, including our array of ecommerce services, our proprietary software for marketing optimization, brand protection, and inventory management, and our two divisions for ecommerce partnerships 

The Kaspien Platform

We take pride in our flexibility, offering multiple partnership pathways that support your individual goals while utilizing the same high level of service and expertise. Kaspien can partner with brands as a software provider, equipping brands with industry-leading software for marketing, brand protection, and inventory management; as an agency, providing anything from complete Amazon channel management to a la carte; or as a traditional wholesale retailer, representing your brand across online marketplaces.  

Your One-Stop Shop for Everything Ecommerce 

When you partner with Kaspien, you gain access to one of the largest catalog offerings in the industry.
Click on a service below to read a blog post about it.
 

Dedicated Partner Support 

You’ll have a dedicated point of contact who is always reachable by phone or email. Anytime you have a question, big or small, we’re here to answer it. Our shared success is grounded in strong communication and support.  

  • Dedicated account manager familiar with your brand’s goals, obstacles, and needs 
  • Tailored, outcome-oriented strategies with actionable steps 
  • Regular communication and reporting 
  • Comprehensive First-to-Market (FTM) Program for successfully launching new products  

Marketing Services 

Our partners receive complimentary listing creation and optimization services, including the creation of enhanced brand content, as well as access to unparalleled paid marketing services at exclusive rates. At Kaspien, we don’t charge a marketing management fee. Instead, your monthly marketing budget goes entirely to fueling your selected services.  

Compliance Expertise 

Our compliance team is versed in government and marketplace regulations for selling in online marketplaces. We’ll work with you to prevent listing suppression and to get them back online anytime there is an issue. 

Proprietary Technologies  

We’ve developed and used proprietary technology to become a top Amazon seller. We can deploy this same array of exclusive software for our partners to protect your brand, enhance efficiency, and maximize your sales. 

Sell Globally 

Our global presence is always growing. We’re active in Amazon US, Canada, United Kingdom, Germany, PAN-EU, and now India. We can also sell your products on Walmart and eBay.  

Want to Learn More? 

Reach out to your Kaspien account manager or use our contact form for questions or to inquire about services you’re interested in!  

Earning customer trust is vital

Trust is paramount to the success and longevity of any relationship, including the relationship between brands and their customers. Brands rely on customer trust for stability and growth, and right now, that trust is weak. According to the 2019 Edelman Trust Barometer, only 34% of consumers trust most of the brands they buy.  

This can be partially attributed to a shift in culture. Edelman’s research shows that consumers now expect brands to take a larger role in society, with consumers expressing interest in brands combatting fake news and misinformation, taking stands on societal issues, and brands expressing shared values. A 2017 study by Cone Communications found similar results, reporting they would purchase a product because the company advocated for a value they share. 

This shift makes sense when considering the rise of corporate giants like Amazon, Facebook, and Google, whose influence on our daily lives is undeniable. Consumers are increasingly concerned with brands’ greater impact on society, giving much attention to how brands handle and protect customer privacy and their impact on the environment, public health, and human rights. 

Brands should take note and respond to this shift. Beyond just general decency, proactively addressing these concerns can help brands earn consumers’ trust, which, surprise surprise, pays dividends for a business.  

The Benefits of Earning Customer Trust 

Earning shoppers’ trust fosters brand loyalty, with repeat customers facilitating growth. Shoppers are more than twice as likely to patronize a trusted brand before a competitor, continue purchasing from that brand, and even act as brand advocates, promoting and defending the brand, if they trust it. 

Customers reward trusted brands
Source: Edelman

Edelman also found that consumers pay significantly more attention to advertisements from brands they trust compared to those that they do not fully trust. With 74% of consumers using at least one method to avoid advertising, that extra attention can provide a significant advantage over competitors. 

Trust is Earned by Demonstrating Competency and Sincerity 

According to Kevin Sanders, a marketing thought-leader with 25 years of experience at Kellogg’s, The Coleman Company, Timberland, and founder of Becoming Trusted, trust is earned through the combination of two factors: competency and sincerity.   

Companies have become exceedingly proficient at communicating how well the product performs, the quality of materials, and its dependability. Collectively, these factors represent competency: a product performs the desired function well. While competency is certainly important, it is only half of the puzzle for earning trust.   

The other half is sincerity. Sincerity is a measure of honesty and fairness, or general goodwill. It means that brands aren’t trying to deceive or mislead their customers and that they’re charging fair prices. It means that they care about their customers’ experience, even after they’ve made a purchase; that customers are more than a number. Many companies struggle to earn customer trust because they fail to communicate sincerity. In most cases, this is not because they lack it, but because they don’t proactively communicate sincerity in their messaging. 

Why is that? 

In the past, brands had the luxury of time to prove them honest and fair. Shoppers couldn’t order online; they had to go to stores, and they made relationships with these businesses. Over time, opportunities would naturally present themselves for a business to demonstrate its sincerity, so it only had to promote its competency in its marketing materials. With globalism and ecommerce, that reality is gone. If brands want to earn trust, they cannot afford to be passive. They must learn to actively communicate competency and sincerity.  

If brands want to earn trust, they cannot afford to be passive. They must learn to actively communicate competency and sincerity.  

How to Earn Customer Trust 

Communicating sincerity is not as difficult as it sounds, so long as you’re willing to match words with actions. Use the following three steps to proactively communicate your brand’s sincerity and build trust. 

1 – Define your mission 
It’s easier to rally your employees and your audience if you have a clear mission to work towards. Start with a long-term vision, but then set achievable short-term goals that will bring you closer to it. By defining your mission, you create a topic that allows you to organically highlight your brand’s sincerity. Share why this cause is important to your company, and report on how your brand helps support it through its goals.  

2 – Invite your audience to aid in your mission 
Once you’ve defined your mission and set short-term goals, invite your audience to help you achieve them. Rallying behind a common cause promotes engagement and builds rapport. REI did this spectacularly during the 2019 government shutdown. As reports came in of littering and vandalism at unstaffed national parks, REI asked its audience to help them clean the parks. It was an opportunity for the company to back up its words with actions, demonstrating its sincerity to earn respect and trust with its community. 

3 – Use social media to engage directly with your audience 
Social media is the vehicle for communicating your brand mission and inviting audience engagement. In the place of in-person interactions, brands can use social media to showcase their products (highlighting competency) as well as their efforts to support their employees, help customers with issues, and their actions in wider societal issues (demonstrating sincerity). 

It also represents a great application of behavioral economics. If brands can cultivate a distinct brand personality that strikes a cord with shoppers, they can create an emotional impetus that encourages purchases or sparks conversations. One need look no further than Wendy’s infamous Twitter account to see the engagement they’ve generated from their fiery interactions with customers and competitors. Readers loved the strong personality and word quickly spread across the internet of Wendy’s twitter account.

The fact that consumers prefer to patronize brands they can trust should come as no surprise. The difficulty has been in learning how to prove worthy of consumer trust in an increasingly skeptical, fast paced world. While challenging, brands should make dedicated efforts to earn customer trust for both the well-being of their communities and the longevity of their business.  

Data is only as valuable as what you do with it. While many companies have become proficient at gathering data, far fewer are adept at transforming it into meaningful actions. 

At Kaspien, we use proprietary applications to convert nebulous data into real, material gains for our partners. In our comprehensive approach, data drives fulfillment efficiency, mitigates risks, enhances marketing, and improves our organizational efficiency, all of which facilitate stronger and more fruitful partnerships. 

We use many programs and strategies to make data actionable, but three of our most impactful efforts are: sales forecasting, intelligent ad automation, and organizational efficiency.  

Mitigate Risks through Predictive Inventory Management 

We process historical sales data through our inventory management system, enabling us to accurately forecast Amazon sales with a 96% accuracy. While 100% accuracy sounds ideal, some error is intentional: Because outofstock issues can slow a product’s sales velocity and harm a brand’s good reputation, we’ve purposely designed the algorithm to slightly over-forecast sales. 

By predicting sales, we can purchase the ideal amount of inventory, moving it in a steady flow from your brand to customers without stagnating in warehouses. This in turn provides our partners a consistent and stable cashflow, while also significantly reducing Amazon inventory fees. 

With more capital free from storage fees, Kaspien is able to more aggressively expand our partners’ catalogs, enhance marketing, and ultimately take a more calculated approach to Amazon that facilitates consistent, stable growth for our partners. 

Refine Your Sponsored Ads through Intelligent Data Mining 

Sponsored Product ads are the highest converting ad type on Amazon, which makes them one of the most valuable marketing tools in all of ecommerce. Since their introduction, Amazon has continued to expand Sponsored Products’ targeting capabilities by adding different ad groups and keyword generation. This added complexity is a double-edged sword, simultaneously increasing the ads’ potential profitability as well as their potential for wasted ad spend.  

To ensure that Kaspien can keep providing industry-leading marketing results, we’ve built a bid optimization software called AdManager. AdManager automates four major optimizations that minimize wasted ad spend and maximize conversion rates. 

We fuel AdManager’s intelligent ad management automations with data drawn from Amazon. The program retains ad performance data indefinitely, in contrast to the 60-day window of historical data provided by Amazon. Informed by the long-term data, Kaspien is able to detect and capitalize on market patterns, enhancing our Amazon marketing strategies and amplifying our partners’ ROI. 

Improving Organizational Efficiency to Better Serve Our Partners 

Though data-driven applications and strategies are key, they’re still only a piece of the puzzle. The other major factor is the group of people using those tools. 

In addition to fueling our internal software with data, we use data to empower innovation and improve our organizational efficiencies. After being processed in the relevant applications, the data is filtered back into a central database, allowing our purchasing, compliance, marketing, and product expansion teams to collaborate more efficiently. 

By streamlining our processes internally and promoting easy cross-department communication, we recover valuable time that we then give back to our partners, helping them strategize and successfully navigate the ins and outs of Amazon, instead of slogging through logistics.  

Growing Together 

Our partnerships are grounded in a mutually beneficial relationship. With every innovation, we both take another step forward. If you want to learn more about our retail and agency services or our self-service software, reach out through our contact form. 

The numbers are in: a 2016 Pew Research Center study confirmed that almost 80% of Americans shop online, with 43% shopping online “weekly” or at least “a few times a month.” More and more Americans are making purchases in the convenience of their own homes.

While this presents challenges to brick-and-mortar stores, it also provides incredible opportunity for manufacturers willing to venture into the world of online marketplaces. Marketplaces operate as their name suggests: they allow multiple sellers to sell products on one website. Three of the top marketplaces are Amazon, eBay and Google Shopping.

Amazon – The most popular marketplace with the largest product selection and the most sellers. Customers love Amazon Prime’s 2 day free shipping and the helpful product reviews.

Google Shopping – The search engine turned verb has turned its sights to capturing sales. Google’s algorithms identify product matches with search results and place shoppable links above the search results, making it that much easier for consumers to make a purchase.

eBay – Known for its vintage treasures, eBay is trying to reinvent itself as a marketplace for old and new. Curated collections give the marketplace a high-class vibe while daily deals still appeal to bargain hunters.

Selling on marketplaces expands brand’s product reach significantly and provides additional branding opportunities. Realistically, most products are already on Amazon, even if not listed by the brand owner or manufacturer.

For retailers who want to sell on marketplaces but don’t want to deal with the complexities and challenges of navigating marketplaces, a successful strategy can be to limit sales to a small number of authorized resellers. Ideally, these resellers should be experts on the marketplaces, bringing additional value to the brand. When unauthorized sellers get hold of product, they often engage in price wars as a method to gain sales, which can really damage brand perception. That’s why the best practice is to monitor producing pricing across all marketplaces. Sound time-consuming? We have a tool to help manage price monitoring. Perispect monitors Amazon (US, UK, DE, FR, JP), eBay, Google Shopping and Yahoo Shopping so you don’t have to.

Capitalize on the omni-channel approach by developing an e-commerce strategy for entering online marketplaces, selecting trusted marketplace resellers and monitoring pricing and sellers.