So massive is the Amazon threat that services designed to combat it — or compete with it — have become big business.
Enter Narvar, a major retail tech provider that works with some 500 retailers, helping them manage deliveries and returns for online orders, communicate with customers and build loyalty through such post-purchase experiences. Now the company plans to expand its operations, and it has the cash to do it, thanks to its new series C funding, announced Tuesday.
Led by Accel alongside Battery Ventures, Salesforce Ventures and Scale Venture Partners, the round brings $30 million to Narvar’s coffers. Since its inception in 2012, the company has raised a total of $64 million. The new funds will fuel an aggressive global ramp-up, with deeper investments in product innovation, research and development and hiring.
The past year has been very good to Narvar. It doubled revenue and employee headcount, and attracted more than 100 new partner brands, such as Costco and Lululemon. They join a client base that includes major apparel and beauty retailers, including Patagonia, Gap, Levi’s, Neiman Marcus, Glossier and Sephora.
That’s a fairly meteoric rise for a six-year-old business. When Narvar began, it set out to “simplify the everyday lives of customers,” said chief executive officer and founder Amit Sharma. “We recognized a huge opportunity for brands to deliver exceptional post-purchase customer engagement, and have helped retailers realize this vision for more than 300 million people.
“More than 70 percent of adults online have interacted with Narvar through the retailers we support,” he added, “and we anticipate this will continue trending up.”
The company sees nothing but opportunity ahead. It cites a report from customer experience consulting firm Walker, which predicts that by 2020, experience will become more important than price and product for brands looking to differentiate.
That’s not exactly a surprise. And yet, as e-commerce constantly evolves under the long shadow of the giants — especially Amazon — one thing that hasn’t changed is the myopic focus on sales. Narvar notes that retailers tend to emphasize acquisition and conversion rather than the post-purchase stage.
The mentality represents a disconnect. Features like delivery notifications, order tracking, customer support, returns and exchanges, and other post-sale matters can be the make-or-break moments for shopper loyalty. Consider Amazon. Delivering convenience and ease on these fronts is where the e-commerce giant excels. Tracking those interactions and messaging also offers valuable customer insights that can influence merchandising, inventory and other aspects.
Narvar operates on the e-commerce side, as well as some offerings that bridge the divide between digital and physical. Think lockers and in-store terminals, and the company is even exploring voice applications on smart speakers. The funding will allow the business to keep innovating on the technology side, while adding headcount and implementing expansion plans into Asia and Europe.
Certainly, Narvar is not the only logistics-focused vendor on the market — Optoro, GrandCanals and AfterShip, among others, spring to mind. The momentum behind such after-sales support services is becoming another key battleground for e-commerce, as the booming industry ticks ever upward.
Online retail sales in the U.S. are projected to reach nearly $540 billion in 2018, according to Forrester Research figures. By 2023, internet shopping is expected to account for one-fifth of all retail sales.
The numbers are already well underway: The Census Bureau of the Department of Commerce announced last week that the estimate of U.S. retail e-commerce sales for the second quarter of 2018 was $127.3 billion, marking a 3.9 percent increase over the first quarter of the year.
And in UPS’ latest Pulse of the Online Shopper study — which surveyed 5,000 U.S. consumers on their shopping habits, from pre-purchase to post-delivery — online shopping was distinctly on the rise.
For the first time in the report’s five-year history, more than half of the participants’ purchases, at 51 percent, were made online. Another key finding: Fast shipping, tracking and delivery notifications are becoming less extraneous and more fundamental, as consumer expectations rise.