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6 mins

How outsourcing your logistics increases your retention rate by 36%

Working with a 3PL partner that understands the needs of e-commerce brands can supercharge your growth and efficiency. Find out how.

Bar chart showing how outsourced logistics can increase your retention rate by 36%
Written by
Manon Fischer
Published on
November 6, 2023

In an industry where customer acquisition is getting increasingly more difficult and more costly because of the increased competition and higher customer demands, your e-commerce brand’s retention rate is now one of the most important metrics to keep track of. 

Your retention rate is your ability to retain your current customer base over a specific period of time. It is the percentage of customers who continue engaging with your brand and repeatedly purchase from your website – it is a measure of customer satisfaction and loyalty. 

Hive has teamed up with Karmen and Alma, two major players in the French e-commerce environment, to create the ultimate benchmark from a thorough analysis of French e-commerce performance. Although this analysis was taken from the French market, its results are highly relevant for e-commerce brands around the world. 

This study was completed with the purpose of creating the most comprehensive analysis of KPIs for e-commerce brands to gain valuable insights on their competitors, compare their performance and create the best business plan for success.

A blog component linking to the download page for the ultimate KPIs benchmark

From our thorough analysis we were able to notice that brands with an outsourced logistics setup benefit from a retention rate that is 36% higher than those with internal logistics. 

How does this happen? This blog article will cover: 

  • Why a higher retention rate is beneficial for your e-commerce brand
  • How outsourcing your logistics can increase retention rates by 36% 
  • Improve your customer experience with an external setup
  • Creating the best post-purchase experience
  • 4 Reasons why working with Hive will increase your retention rate

Why a higher retention rate is so important for your brand

With a higher retention rate, you do not have to focus as many efforts into attracting new clients, hence, lowering both your customer acquisition and churn costs. Happy customers can become your most successful sales team.

Word of mouth is one of the most powerful tools your e-commerce brand can leverage. It builds trust, credibility, and visibility for your e-commerce. The more loyal advocates you have speaking about how amazing their experience was with your brand, the less you will have to spend on marketing ads. 

Higher retention rates are also beneficial in increasing your customer lifetime value (LTV). This represents the total revenue your business can generate from a single customer throughout their entire “lifetime” with your brand.

How outsourcing your logistics increases your retention rate by 36%

Outsourcing your logistics to a 3PL partner allows your brand to benefit from a set-up that is optimized for e-commerce. Outsourced logistics providers work with carefully programmed warehouse management systems (WMS) that have the capabilities to adapt to each brand’s needs.

Improving your customer experience by outsourcing your logistics

Happy customers are loyal customers. When you outsource a portion of your business, you also put customer happiness in the hands of your partner. This is why when you work with a 3PL, it is important to find one that understands your e-commerce brand. 

But how does the right 3PL partner improve customer experience?

1. Shorter waiting times

With optimized fulfillment processes, your 3PL partner is able to shorten the lead time between the check out and order delivery. 

According to a report from Sendcloud, nearly half of online shoppers abandon their cart if the indicated delivery time is too slow and, the average expected waiting time is 3.3 days. A longer waiting time will lead to customer dissatisfaction and hinder your retention rates performance.

2. Better unboxing experience

The unboxing experience is one of the core drivers for a positive and memorable customer experience. With visually appealing packaging, properly packed products, maybe even a free gift, your clients will feel like they matter more to your brand. 

With captivating packaging, you can push your customers to advertise your brand on social media. The recent rise in the “unboxing videos trend” has become quite popular on both TikTok and Instagram.

When you work with a tech-enabled 3PL partner, you can also customize certain packaging processes, such as adding flyers or cards specific to what’s in the order, or which customer ordered it. This personalization goes a long way towards making your customers feel valued.

3. Quality fulfillment

Thanks to the 3PL partner’s expertise and precise fulfillment processes, your brand benefits from quality picking and packing. With error-free fulfillment and careful packaging, there is less potential for breakage, missing products, or mistaken SKUs. 

This helps you reduce your returns rate (no mistakes means consumers don’t need to send the order back) which is highly beneficial for your e-commerce brand. In addition, a properly packaged order makes for happy, loyal customers.

4. Creating the best post-purchase experience

23% of online shoppers would not return to an e-commerce store if order tracking was not available the first time, according to Sendcloud

That’s why your post-purchase experience is crucial for customer retention.

Working with a 3PL partner helps you free up your time and money to focus on your customers and your post-purchase experience to ensure retention. 

Some 3PL partners, like Hive, offer solutions to help with order tracking, helping to relieve your customer support team from having to respond to queries like “where is my order?”, “why is my order taking so long to arrive?”. This allows you to save both money and time. 

Creating features for automated emails is a great way to keep your customer in the loop, and you can use them to generate further revenue. Consider adding upsell options to your order tracking to get customers to buy again.

3 reasons why working with Hive helps improve your retention rates

If you are currently looking to increase your retention rates and trying to find the ideal partner, look no further. Here are 3 reasons how Hive is able to help you increase retention rates whilst reducing costs and efforts from your side.

1. Send your customer automated tracking emails

When you work with Hive, you get access to a range of post-purchase features. One of these is automated emails that you can send your customer as their order is being prepared.

You can customize these emails to match your brand’s look-and-feel, and seamlessly integrate with Klaviyo for further functionalities.

This feature automatically sends updates to your customers on their order status.

2. Cross and upsell products through the Post-Purchase App

Which emails do customers open the most? Order tracking. That’s why with Hive, you can add cross and upselling to your order tracking portal. Drive customers back to your website with relevant further products and content.

This feature has seen a re-ordering rate that is 52% higher for the brands that use it in comparison to those that do not.

3. Create the best unboxing experience with Hive

When working with Hive, you can work with a dedicated packaging team to support you in the entire journey, from procurement to design. 

As mentioned earlier, the unboxing experience is extremely important for your customers. With Hive you can obtain personalized packaging, with  competitive pricing. In addition, the Hive App allows you to create add-on rules for our pickers and packers in the fulfillment process.

Add-on rules are specific automations you can set up in your Hive App to insert extras in each order, or even a specific set of orders. For example, you can set a rule asking to add a promotional flyer for every order made between date X and date Y. 

By adding customized, branded stickers, promotional flyers, gifts and so on, you are showing your customers that you care about them. These help increase customer satisfaction and loyalty to your brand, hence, increasing your customer retention. 

So why wait? Increase your retention rate by working with Hive today. Book a demo now and find out what Hive can do to empower your brand.