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05 part 2: Do's and Don'ts of shipping Subscription Boxes from the USA to Canada and internationally
Bonus Episode22nd May 2024 • Outside the Box with Asendia USA • Asendia USA
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Our special guest, John Haji, Co-founder and Head of Partnerships, SubSummit, discusses the growth areas in the physical box space, subscribe and save functions, eliminating the churn rate surrounding the delivery experience and more!

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::

Hey everybody, welcome back to part two, episode five.

::

Focused on subscription boxes with our special guest, John Haji.

::

Thanks so much for listening. Enjoy.

::

There's a lot of facets of logistics

::

that play into the post-purchase experience

::

that are very important to hone in on.

::

Awesome.

::

Those are those are great points. I agree.

::

You know, our, our job as a, as a partner

::

to a lot of these brands in the

subscription box space is to,

::

you know, obviously, you know,

we can talk about this is what we do,

::

but when it comes down to it is we want to

help create a great customer experience.

::

We want to help eliminate as much churn

as absolutely possible.

::

You know, surrounding the delivery

experience for, you know, your box.

::

Right.

::

So I think of, you know, let's think of

a skincare brand.

::

Right.

::

And how important it is

that if you're on this 30 day

::

continuity program where you're

going to run out of supplies,

::

that, making sure that your deliveries

come at a very regular cadence,

::

it's fulfilled at a very similar time

and also delivered in a very similar timeframe.

::

How important that is to make sure

::

that you're not losing subscribers,

you know, something like that situation,

::

Especially on a

::

you made a really good point there too

as well, especially on products that are,

::

you know, depletable products

like you want to adhere to a schedule,

::

where this product is arriving

every 30 days.

::

It's I think the experience

is even more important versus

::

a subscription box that is providing some level

like discovery and delight on a product

::

where maybe it's not so, so much of a

of a need versus like, a want.

::

But for those, those subscription box

companies that have products of

::

that are more of a need.

::

You know, it's really,

really important to kind of,

::

just strengthen

::

the experience so that the cadence

that they're expecting is, is on par.

::

Absolutely.

::

The other thing that I have found is

you talked about,

::

you know, milestone tracking updates,

consistent tracking updates.

::

So with customer experience comes in.

::

And just as the market shifted from,

you know, if we look at pre-COVID

::

to, let's call it post-COVID,

you know, the amount of,

::

you know, shippers that have transitioned

or are working to transition from a,

::

you know, a DDU delivery method

to a DDP delivery method, right?

::

And there are a specific set of challenges

with a subscription box

::

because of the high SKU count,

typically in each individual order.

::

So, that can create a challenge

::

for some shippers.

::

and again, the purpose of this podcast

is more educational.

::

Right?

::

But it's for the purpose

of conversation too.

::

I have to be able to speak to certain

networks, and that includes our network.

::

Right.

::

So I look at what we do, even since,

since we stopped

::

with, with G box, but we launched our own

Canadian delivery network, right.

::

It's it's completely DDP delivery network.

::

We now facilities in Mississauga,

Calgary, and Vancouver.

::

And what our team, though

::

our Canadian team is able to do

is to get a pre set list of,

::

you know, not ingredients, but SKUs really

you know of what's inside of each box.

::

They can categorize them

and they can, you know,

::

classify everything and do it

ahead of time before the actual packages

::

are getting to the border

to help with a seamless clearance process.

::

So there's no delays in that way.

::

But also to be able to say,

hey, we we can't, you know,

::

we can't do this, you know, aerosol

or we can't do whatever that might be.

::

And I'm saying all this

to lead it back to, and again,

::

this is not tooting my own horn,

but it's so important for a brand to,

::

it's better than a horse reference

that we've had in the last two episodes.

::

Not that he’s tooting his own horn.

::

Okay. All right, so.

::

But it's. Go ahead. Go on. Please. Go on.

::

Cut that one out right there. Yeah.

::

So it's better though.

::

It's it's so important

::

and vital to work with work

with a partner in the logistics space.

::

I think that genuinely cares

and is knowledgeable about these things.

::

To be able to really help,

you know, again, we're going to

::

we're going to work to make sure

that you have a good experience.

::

We're going to help

to eliminate as much churn as possible,

::

keep that customer as long as possible

by us being a partner to your business.

::

and that's where that comes in.

::

And I think, you know,

just for the sake of time,

::

I want to talk to you a little bit about

what you see in terms of differences,

::

with people that make decisions

surrounding logistics

::

when it comes to for subscription

box space, you know, let's say a start up,

::

maybe a mid-market level,

and then an enterprise level.

::

you know, box company

and what that may look like,

::

Kind of their thought processes, decision

making when going internationally?

::

Yes. Yeah.

::

I think on the startup side of things,

::

they're very much thinking,

let me just get my feet wet and,

::

and churn it out.

Yeah, that's right.

::

That's, that's their typical...

It’s about survival,

::

and let's make it happen.

Yeah.

::

Yeah, and honestly the advice there too

is because you touched on it is

::

no one really should be entering

internationally unless they've done their,

::

unless they've done

like rigorous research on

::

shipping internationally when it comes

to like costs, the products inside,

::

Right.

::

Like while the box for a lot of folks

is one single SKU,

::

there are multiple different SKUs

within that box and multiple different

::

products within the box that have

::

different, maybe harmonization codes,

and there's different rules

::

and regulations around

the different products inside that box.

::

So before anybody enters

in internationally,

::

even as a startup,

they should be researching that.

::

But I think startups are

always just thinking,

::

let me just get into international,

::

once they start to get to that mid-level

range, and even in the enterprise, it's

::

it's very easy on the

operations side of things.

::

And I was very guilty of doing this.

::

I don't want to use the word guilty

in a negative way.

::

Is that like we're always looking at,

you know, cut costs somewhere

::

and finding the best carrier

who's going to help us cut costs but also

::

deliver on transit times, who's

also going to understand the subscription

::

industry to help us mitigate

these risk of when these boxes

::

are coming over the border.

::

So, mid-level and enterprise I,

::

I'm going to package them

together because I think

::

they're always thinking about that.

::

Right. It's, it's the costs.

::

It's well, I'm experiencing issues

with, with our packages.

::

Maybe the costs are fine,

but when they're coming into the country,

::

they're not moving as quickly

or we're coming up where

::

we're having issues at the border.

::

And so finding the right partner who's

going to help mitigate all those risks

::

and who understands the industry,

::

and understands

the nuances of a subscription box,

::

is going to come into play

for a lot of those, those brands.

::

Yeah.

::

Go ahead.

So that's a great point.

::

I had a... I wanted to ask your opinion.

::

So you've been doing this

a long time, obviously.

::

The clients’ behavior

or anything or their customers,

::

what has changed your opinion

from when this first started out,

::

when you were in the beginning is

what has changed in the market, in your opinion?

::

Anything? Any kind of buying

behaviors has changed?

::

Cause I... when I was at UPS,

we had a lot of these companies,

::

and in some the cadence

was the first to the fifth,

::

they would ship.

::

Then the other group would ship

the eight to the 10th and whatever, and

::

but during COVID,

it kind of slid a little bit

::

because the transit expectations

were longer. Right?

::

And that was a tough time

for subscription boxes.

::

But it was good.

A lot of people were home.

::

But I'm just curious, what,

in your opinion, has changed? Anything?

::

In the market of what

the expectation in this sub space?

::

Yeah.

::

Well, you know,

::

I think there's a lot of things

that there's a couple different thing

::

that changes, you know,

where it was very much

::

the subscription box space,

at least when we started off,

::

it seemed like there were

more boxes out there

::

that were all about discovery

and delight of different products.

::

And they would have

this, you know, bulk renewal,

::

has shifted to

::

especially when COVID hit, it was,

you know, everyone, everyone

::

didn't realize how many subscriptions

A. they had to begin with.

::

Everyone always says they have like four...

Exactly, exactly.

::

...four subscriptions.

I have a friend of mine has eight of them. Eight!

::

She has eight of them.

Yeah.

::

Yeah.

That's a lot of money a month.

::

Yeah, right.

Right Sharvon?

::

Nah, I'm just kidding.

::

Yeah, it's it's it's crazy

when people kind of back

::

into their finances and realize

how many actual subscriptions they have.

::

So then they start to, to cut back at,

::

okay, which ones do I keep,

which ones I don't.

::

And I think the ones that

were more of a

::

need stayed, versus the ones that

were just kind of a want,

::

so, you know, I'm subscribed

to a couple of subscriptions.

::

One is an air filter for my,

for my AC system.

::

Every three months I get a filter sent to my...

You’re living...

::

You're living that husband and dad life.

::

Okay, you got to take care...

I don’t have to jump in my car,

::

I don't have to go to the local Home Depot.

::

and grab an air filter.

::

But that's something that you need

to replace every single month.

::

Right.

::

And, you know, no one thinks about those,

those subscriptions, but,

::

you know, there's been a shift in the type

of subscription that you purchase, ones

::

that are maybe a little bit

more of a, of a need than a want.

::

And then also has shifted

a lot in subscription box

::

companies is the ability

to offer the consumer this flexibility

::

to manage their subscription

with a little bit more autonomy.

::

Right.

::

So making it easier for them

to log into their accounts,

::

if they don't want the box this month

to put it on hold, pause it, skip a month.

::

giving them the kind of

the flexibility to say,

::

you know, you don't have

to subscribe this month.

::

And that kind of actually helps

increase the LTV on the consumer

::

because they don't have to

they don't think that, okay,

::

I have to go through this

daunting process of canceling right now

::

because they've given me this flexibility

of just pausing it this month.

::

And you're more likely to save

that customer by offering the flexibility

::

to manage their subscription

with a little bit more autonomy.

::

And that's something that we're seeing

more with subscriptions as well.

::

So you... that's a good point

because it's mostly apparel, right?

::

Like I know a couple of large...

Could be skincare, could be apparel.

::

You can go in and pause.

A couple of large ones...

::

Typically what will happen is

you'll get a notification,

::

it'll say, hey, we're preparing your box

or we're doing something like that,

::

you know, limit, you know,

want to modify any changes.

::

You can go in and you can change.

::

Very cool functionality.

::

So John, I know we're

getting close on time.

::

We are?

::

JW, we are.

::

So so let's we're going to bring it

home here. So here we go.

::

So a couple things I wanted to share,

some statistics for the listeners out there.

::

I know you know I love dropping a little knowledge.

Here we go.

::

No, in the last podcast we put out

or maybe the one before that

::

I can't keep track.

::

But John, think about these

numbers real quick.

::

The UK

::

e-commerce market in

::

2023 is valued at $169 billion.

::

Canada valued at $44 billion.

::

Australia sits at about $45 billion.

::

Okay, so we're looking at,

::

just a tremendous amount of money there.

::

You're not going to add it up?

::

But no, no, no,

I'm not going to add that up right now.

::

But...what I want to...

Did you say UK at 169?

::

UK at 169 and Canada at 44?

::

Yes. Canada's ninth largest...

Canada's ninth largest e-commerce market.

::

UK is the third largest.

::

It's China, US, UK.

::

And then there's country... because we

::

one of the podcasts we recorded

previously focused on Canada, UK, Australia.

::

So that's why I'm talking about these.

::

And as Asendia USA,

our our largest export countries,

::

for our business is Canada, Australia, UK.

::

And that's why we're focusing on them.

Yeah. So, but for us,

::

as an organization, our largest partner

for export is Canada.

::

And that's what we focus on more.

But anyway, let's

::

so, shifting over here real quick,

::

if you can give us two minutes,

I just want to know,

::

I think probably for my

own personal knowledge is,

::

what are a couple bullet points,

biggest challenges facing subscription

::

box companies just going into this year

or throughout this year?

::

I know I'm hitting you

with the good stuff.

::

As it's related to logistics or as a whole?

No, just in general.

::

In general.

I would say growth strategy. Right?

::

I mean, you know, it's

running business, right?

::

Yeah.

::

One...the one and two punch that everyone is always

focusing on is acquisition and retention.

::

So how do we better acquire customers?

::

And especially since

::

sometimes, you know, paid

media could be such a volatile market,

::

one day you acquire a customer at $10

one day or acquiring a customer at $100.

::

So it's making sure that

on the acquisition side of things, you're

::

balancing it well enough across

a diversified set of channels

::

to acquire customers

and lower your cost to acquire them.

::

That's always been a challenge.

::

A lot of folks are,

a lot of merchants are always focusing on.

::

And then, of course,

you know, retaining them.

::

You know, when acquisition is so volatile

and costs are through the roof,

::

you have this, this loyal customer

base, who,

::

who are who's already purchased from you,

who's already engaged with you.

::

And so you want to make sure

that you're nurturing those relationships

::

and providing an amazing experience

even after the fact, because those are

::

the ones who know your brand, who have

been loyal supporters of your brand.

::

So it's focusing on how to

better retain them

::

and just enhance the experience for them

as they are part of your community

::

and your brand for as long as they are,

because of course that increases LTV.

::

So, those are probably the two one

and two things to focus

::

is on a better acquire customers,

::

but then also, once you do, it's making

sure that you're retaining them,

::

to increase LTV and just nurturing them

and creating a better experience for them.

::

Okay.

Hey John. Hey John. Two questions.

::

What do you think's acceptable churn?

::

Percentage?

::

In your opinion.

::

Six... 6 to 8%.

::

Wow. That's pretty good.

::

And then the thing... what's the

average length of a sub box

::

keeps the customer?

LTV?

::

Yeah.

Lifetime Value.

::

Yeah, how long? *cough* Sorry.

::

Great question.

::

And obviously I think it varies depending

on the industry the actual box is in.

::

Right.

::

You're going to see again going back to

products that are depleteable and replenishable.

::

I bet the consumer that is subscribed

to Dollar Shave Club

::

or Harry's Razor has a much greater LTV

and they've received many more boxes

::

than let's say a Gentleman's Box,

because after so many months

::

you can love the socks

and the ties in the box,

::

but your sock drawer

gets full, right?

::

Not this guy. Never quit.

::

Never quit.

::

Not Nick. Nick was our...

So what do you think about...

::

Nick was our...

::

What do you go, him? No, no.

::

Come on.

Nick was a subscriber for years.

::

Right?

Years!

::

Years.

A lot of socks my friend.

::

He was an outlier.

I’m surprised you didn’t change your strategy then, why...

::

Yeah he was...he was an outlier.

He’s afraid of me.

::

And then you have any of the subscription

box that are monthly versus quarterly.

::

So. Right.

::

The the box count,

the LTV count is much different.

::

And then there's

pricing that plays into it as well

::

where some boxes are $9.99

all the way to $159.

::

So there's obviously, a lot of different

factors that play into it.

::

But I would say

::

kind of general rule of thumb for anybody

that has a subscription box

::

and is looking to generate high LTV

on their subscription box,

::

it's about thinking about those products

::

that are going to fall

into this kind of category of,

::

you know, continuity

where you need to get it more and more.

::

You're going to see that the consumer

is going to stay on much longer

::

with those type of products

::

than something that is more of like,

you know, a discover and delight product.

::

And if you are a discover

and delight product,

::

make sure you're focusing on delivering

an amazing experience, building an awesome

::

community, engaging with the person.

::

And that's going to help kind of offset

and create better LTV for them.

::

Okay. All right.

::

Well, this has been fantastic.

::

I want to highlight...

Are you cutting him off?

::

Well he's got to go to a meeting,

I'm sure.

::

So we've got the sign behind him

::

that for the show that that he has been

running and started and founded for years.

::

SubSummit in Dallas,

th,:

::

Be there. Don't miss it.

::

And then I just want to thank you,

John, for your time.

::

We both do, to talk today

to today's listeners about the

::

do’s and don'ts of shipping

subscription boxes internationally.

::

We went on an adventure, a journey.

We talked a lot about just holistic industry stuff.

::

But thank you so much for your time.

::

Yeah. John, Nick,

thank you so much for having me on

::

and allowing me to share my knowledge.

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