In just a few short years, Amazon created a booming advertising business that opened doors for other retailers, like Walmart and Target, and put ecommerce advertising on the map. Now, one in eight digital ad dollars goes to advertising on ecommerce properties, according to eMarketer — and that number will likely increase as brands shift more of their budget to retail due to the industry’s valuable first-party data, ability to target ads close to the point of purchase and more.
But while Amazon, Walmart and Target are focused heavily on building out their digital ad offerings, they are missing out on a million-dollar, or even billion-dollar, marketing channel that’s right in front of them: their packages. Whether they sold advertising space within their packages (just like they would on their digital channels, where third-party advertisers would target packages with certain products inside) or inserted their own marketing materials (i.e. printouts that included loyalty program information or exclusive coupons), the impact on revenue would be massive.
Four Billion Missed Connections
Think about it. Amazon now delivers more U.S. packages than FedEx and UPS. In 2020 alone, Amazon Logistics delivered over four billion packages in the U.S. That’s four billion missed opportunities to engage with customers at the moment they are happiest: when they are opening their package.
Ironically, Amazon’s annual advertising conference — called unBoxed — didn’t actually mention anything about the box, despite the company using the event to unveil a slew of new offerings meant to help brands “create authentic customer connections.” How could they disregard the package, which is arguably the most effective channel to create an authentic customer connection? For one, packages have a 100% open rate — no other channel can claim that with confidence; and two, packages offer an unmatched opportunity for brands to connect the dots between the online shopping experience and a real-life touch point — at an intimate moment, inside the consumer’s house, with their undivided attention.
Ignoring the package is a colossal waste of valuable branding real estate, a missed opportunity to connect with consumers, and an even bigger missed opportunity to gain incremental revenue. Considering companies are seeing up to $3 in additional revenue per order because of unboxing marketing efforts, Amazon is literally throwing millions of dollars out the door (or in the recycling bin) with each boring cardboard box.
Unboxing Marketing 2.0
Unboxing marketing, whether it’s custom packaging or putting a paper insert into a box, is nothing new. Fulfillment centers all over the world have stacks of pre-printed marketing pieces that go into packages (we’ve all seen those printouts from Blue Apron and other DTC brands). But there are reasons for the lack of adoption from some of the major players. The old way of doing things often includes complex rules that require manual labor to properly distribute and can quickly become too difficult or expensive to execute, especially on the scale of a retailer like Amazon or Target.
But static printouts are becoming a thing of the past as new technologies make it possible for targeted marketing messages to be printed for each outgoing package (with little or no effort from the fulfilment teams). I’m calling this unboxing marketing 2.0. Now, a message within a package can become more like a digital advertisement, with options for A/B testing and different messages for different audiences.
Targeted messages within packages are finally possible and bring the concept of online retargeting to the offline world — and whether Amazon, Target, etc. created their own technology in-house or leveraged tools from outside vendors, and whether they kept their packages for their own marketing messages or offered third-party advertisers the opportunity to advertise within them, there are endless ways they can leverage the valuable real estate as a marketing channel. Retailers large and small are facing incredible challenges right now, between rising CPMs, the loss of attribution due to privacy regulations and the logistical nightmares from the supply chain, and it’s forcing them to rethink their marketing entirely. Many brands are turning to nontraditional methods that are powered by first-party data — unboxing marketing being one of them — and Amazon, Target and the like would be absolutely crazy to miss out on the opportunity by ignoring their packages.
Ryan Millman is the founder and CEO of UnDigital, a provider of personalized unboxing technology. A serial entrepreneur with a passion for pushing the boundaries of marketing, technology and innovation, Millman started his first company out of his college library in 1999 and has since bootstrapped more than five businesses, ranging from adtech to ecommerce to manufacturing, to $140 million in revenue — without raising a dollar of outside funding.