The Future of Post-Purchase Customer Engagement

I’m excited to announce our investment in Narvar and partnership with Amit and his team. As a way of background, Narvar is the Software as a Service (SaaS) leader in ecommerce post-purchase optimization. What is post-purchase optimization? Think about it as improving all the touch points from when a customer clicks “buy” until the next time they buy again, including shipment tracking, returns, delivery optimization, etc.

This space started out as an offshoot of operations, but has expanded into a strategic customer touch point because of its impact on repeat purchase and driving Net Promoter Score (NPS), the gold standard measurement for customer loyalty. Shipment speed, free returns and transparent communications are the front line battle field for retailers looking to gain mindshare in a world where Google, Facebook, Twitter and Pinterest are all becoming shopping destinations.

Think about it as improving all the touch points from when a customer clicks “buy” until the next time they buy again, including shipment tracking, returns, delivery optimization, etc.

We couldn’t have found a better entrepreneur to back to attack this opportunity. For the past ten years, Amit has helped leading merchants tackle next generation supply chain and logistics challenges. At Wal-Mart, Amit led the efforts around “ship-to-store,” which now accounts for 40% of total ecommerce sales. At Apple, Amit led their initiatives around post-purchase driving an already high NPS up by an additional four points. He’s highly respected across the industry. At the same time, Amit is one of the most humble and driven founders I’ve ever met. He’s at the same time coachable and self-reliant. I’m excited to welcome him to the Accel family.

As an investor in several leading ecommerce brands / retailers (Dollar Shave Club, J. Hilburn, Serena & Lily, Skullcandy, etc.), I’ve had the benefit of seeing trends through the eyes of cutting edge retailers who are typically early adopters of new technology. The first wave here was in marketing automation, which was a huge focus at Battery and at Accel too. Between the two firms, we’ve had the privilege of working with over twenty portfolio companies with roughly half of those at scaleM (Bazaarvoice, BlueKai, Brightedge, Campaign Monitor, ExactTarget, Freewheel, Hootsuite, Omniture, Optimizely, Responsys, Tune, UserTesting, etc.). While this category has been very good to me and my respective partners, it has become harder for new companies to differentiate. Online marketers are inundated by new VC-backed startups on a daily basis. Given the lack of whitespace, I haven’t made a new investment in this space for the past two years.

Most ecommerce software has an end-state of “purchased.” However, from the customer’s perspective, “purchased” is the initial state.

While I saw these companies becoming incredibly sophisticated around getting customers to their site and then getting them to transact, there was a huge blind spot once people clicked “buy.” Most ecommerce software has an end-state of “purchased.” However, from the customer’s perspective, “purchased” is the initial state. I saw my portfolio companies struggle with shipping policies, return processing and customer calls asking about their shipment. I saw them go from 1–2 shipping carriers to a half dozen or more. I saw them starting to use store inventory instead of having the warehouse be the origin of all online orders. We hacked together solutions, but in the grand scheme of keeping up with Amazon’s bar for service quality, we were falling further and further behind.

Enter Narvar stage left. We first experienced their solution through our portfolio companies, BaubleBar and Bonobos. For vertically-integrated brands, the ability to own the shipment tracking process was not only good customer service, it also introduced another brand touch and possible upsell. Narvar’s early tracking product was the ideal wedge into accounts. It had a simple implementation, reduced support call volume, increased repeat purchases and gave marketing another lens. It elevated the post-purchase czar into a strategic role, while also helping other execs get a win.

Instead of losing a customer at the point of return, retailers could now offer to deliver a different size or style when they came to pick up the original item.

But it wasn’t until Narvar’s product suite expanded that I truly saw this company as a prospect for Accel. By adding “returns,” Narvar now started to get into inventory optimization and cross-selling. The solution required a bit more integration, but it was a lot harder to rip out. Instead of paying (literally) hundreds of thousands on pre-printed return labels, retailers could now dynamically generate labels to send items back to stores in short supply. Instead of requiring stores to have to call a central number when a customer brought in an online return, they could now handle these transactions directly. Instead of losing a customer at the point of return, retailers could now offer to deliver a different size or style when they came to pick up the original item. It became clear that Narvar’s roadmap was getting to a level of strategic value and complexity that it would be hard for retailers to replicate. Transaction sizes rose accordingly.

As Narvar added its 100th retailer, another benefit has come into play. They now track 15M packages per month and are the only software company to have a comprehensive data set or reliability by carrier by region to help retailers optimize shippers by actual delivery times. Narvar can see disruptions in the chain and alert customers in advance. Soon retailers will feel just as blind without a real-time shipping dashboard as they would today without web analytics.

They now track 15M packages per month and are the only software company to have a comprehensive data set or reliability by carrier by region to help retailers optimize shippers by actual delivery times.

This dashboard will be the launch point for new shipping relationships. Like many venture capitalists, I’ve looked at the new wave of last mile logistics companies. While I am a huge fan of the end-user value, I wrestled with the capital efficiency of these businesses and ability to compete at true scale. I see Narvar as a software layer that can help retailers connect into these channels as it makes sense. Instead of rolling cars or dropping packages, we’re providing the selection, orchestration and audit.

As a single point of integration, Narvar will soon enable hundreds of retailers to take advantage of real-time delivery options without one off integrations or relationships. We’re excited for the chapters to come. There is no denying the trend towards people getting products delivered whenever and wherever they want. It is our pleasure to team up with Amit and his team to help today’s best merchants lead the way towards a new standard in service and experience.

Brian O’Malley, Partner, Accel