In just a few years, Amazon has created a booming advertising business that has opened doors for other retailers, like Walmart and Target, and put online advertising on the map. According to eMarketer – and that number will likely grow as brands reallocate more of their budget to retail due to valuable first-party industry data, the ability to target ads close to the point of purchase, and Moreover.
But while Amazon, Walmart, and Target are heavily focused on growing their digital advertising offerings, they’re missing out on a million-dollar, or even billion-dollar, marketing channel that sits right in front of them: their packages. Whether they sold advertising space in their packages (as 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. say impressions containing loyalty program information or exclusive coupons), the revenue impact would be huge.
Four billion missed matches
Think about it. Amazon now delivers more packages to the United States than FedEx and UPS. In 2020 alone, Amazon Logistics delivered more than four billion packages in the United States—that’s four billion missed opportunities to engage with customers when they’re happiest: when they open their package.
Ironically, Amazon’s annual advertising conference — called without box — didn’t actually mention anything about the box, though the company used the event to unveil a slew of new offerings aimed at helping brands “create authentic customer relationships.” How could they ignore the bundle, which is arguably the most effective channel for creating genuine customer connection? For one, the packages have a 100% open rate – no other channel can claim that with confidence; and second, packages offer brands an unparalleled opportunity to connect the dots between the online shopping experience and an actual touchpoint – at an intimate moment, inside the consumer’s home, with full attention. .
Skipping the package is a colossal waste of valuable brand real estate, a missed opportunity to connect with consumers, and an even bigger missed opportunity to earn additional revenue. Considering companies see up to $3 in additional revenue per order due to unboxing marketing efforts, Amazon is literally throwing millions of dollars out the door (or into the recycling bin) with every boring cardboard box.
Unpacking Marketing 2.0
Out-of-box marketing, whether it’s custom packaging or inserting a paper insert into a box, is nothing new. Distribution centers around the world have stacks of pre-printed marketing pieces that go into packaging (we’ve all seen those prints 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 often includes complex rules that require manual labor to properly distribute and can quickly become too difficult or expensive to enforce, especially at the scale of a retailer like Amazon or Target.
But static printing is a thing of the past as new technologies make it possible to print targeted marketing messages for each outgoing package (with little or no effort from fulfillment teams). I call this marketing unboxing 2.0. Now, a message in a package can look more like a digital ad, with A/B testing options and different messages for different audiences.
Targeted messages in packages are finally possible and bring the concept of online retargeting to the offline world – what if Amazon, Target, etc. have created their own in-house technology or leveraged tools from outside vendors, and whether they have curated their packages for themselves marketing messages or offer third-party advertisers the ability to advertise on them, there are countless ways to leverage valuable real estate as a marketing channel. Retailers large and small are currently facing incredible challenges, between rising CPMs, loss of attribution due to privacy regulations, and supply chain logistical nightmares, and it’s forcing them to completely rethink their marketing. Many brands are turning to non-traditional methods fueled by first-party data – unboxing marketing being one of them – and Amazon, Target and others would be absolutely mad to miss this opportunity by ignoring their packages.
Ryan Millman is the founder and CEO of Not digital, a custom unboxing technology provider. A serial entrepreneur with a passion for pushing the boundaries of marketing, technology and innovation, Millman launched his first company out of his college library in 1999 and has since started more than five ventures, ranging from from ad tech to e-commerce to manufacturing, for $140 million in revenue – without raising a dollar in outside funding.