Any Other Business: 31 July 2020

This week’s AOB looks at a new zero-waste fashion collection, Amazon’s latest SMB Impact Report, and the big mistake German e-commerce businesses are making with their customers.

The Direct to Consumer (D2C) market has been one of the biggest e-commerce growth trends of the pandemic, meeting the needs of consumers unable – or too anxious – to visit stores. But whilst the category typically involves food and beauty products, a slightly more unusual player is starting to get noticed.

Smol¹ is a UK-based detergent subscription service which delivers laundry capsules, dishwasher tablets and fabric conditioner to customers through their letterboxes. The brand prides itself on its eco-friendly credentials, reducing the plastic and chemicals in its packaging, and formulating its products to remove animal fats for a greener range. It also offers a packaging returns scheme for refill and re-use.

Smol is now the fastest-growing laundry brand and detergent subscription service in the UK, powering 1.5 million washes each week – with interest from customers tripling during Covid-19. Smol’s investors are not surprised by the growth, attributing it to the convenience of its D2C model. “When people think of technology disruption, it is normal to think of digital products and internet tools. However, technology has the power to make life better for us in the most unexpected ways and we believe [Smol has] tapped into just such an opportunity” ², said Suranga Chandratillake, partner at Balderton Capital, one of Smol’s investors.

Amazon’s 2020 Small Medium Business Impact Report³ has given some insights into its continual dominance of the online marketplaces sector.

In the 12 months to May 31, US marketplace sellers sold 3.4 billion products on Amazon – up 25.9% year over year. More than US$3.1 billion in sales were to consumers outside the US, up from US$2.4 billion a year ago. Amazon did not specify how many retailers and brands sell on its marketplace, but in its 2018 Small Business Impact report it said more than 1 million US sellers did so.

Marketplace products now account for more than 50% of all units sold on the site, outpacing first-party sales (i.e. inventory owned by Amazon).

Selling on an online marketplace can connect your e-commerce business with millions of customers around the world. But which one is right for you? Check out our roundup of the leading platforms to discover which ones could give your sales a boost.  

Fashion resale platform ThredUP⁴ has partnered with Zero Waste Daniel⁵ (ZWD) to create ReFashion⁶, a special collection of genderless apparel made from recycled materials.

ZWD has made a name for itself as a fashion brand with a sustainable focus: all pieces are made from waste fabric from the garment industry, with a commitment to send as little to landfill as possible.

The ReFashion collection includes second-hand hoodies, leggings and sweat shorts, with a leaf design made from unsellable scraps hand-sewn onto each piece to symbolize its earth-friendly credentials.

The collection was inspired by learnings ThredUP uncovered while compiling its 2020 Sales Report, explains Erin Wallace, the company’s vice president of integrated marketing. “Our survey found that nearly 90% of people are looking for thrifty new habits [adopted during the pandemic] to continue in a post-Covid world. Now felt like the perfect time to give these newfound thrifters a 100% zero waste collection that inspires them to bring new life to their clothes through reuse and DIY.”⁷

The global e-commerce packaging market was valued at US$10.26 billion in 2019, and is expected to reach US$21.78 billion by 2025, according to a new report⁸, which nods to the rapid rise of e-commerce in India and China as a catalyst for the growth.

The figures may be alarming to the anti-plastic movement, yet there are many companies developing innovative alternatives. Startup LimeLoop⁹, for example, recycles billboard wraps to create durable shipping pouches that can be reused up to 2,000 times. Elsewhere, the Better Packaging Co. has developed compostable mailers using plant-based materials free of microplastics.

A new study¹⁰ has found that online retailers in Germany – one of Europe’s largest e-commerce markets – are failing to adequately communicate with customers after they’ve placed their orders. 

The research by parcelLab¹¹ involved analyzing the shipping services of 100 of the biggest online stores in Germany. A quarter of them stop communicating with their customers after just one email – and in many cases this was just an order confirmation email. And nine of the 100 don’t communicate with their customers at all once they’ve placed an order.

Keeping your customers informed about the status of their shipment via tracking and notifications is just one way to deliver a great customer experience and secure repeat custom. Learn more ways to improve your customer service here.