Narvar, a startup that enables companies to better engage with customers after online purchases, said it has raised $10 million.
Narvar provides companies with software that improves the post-purchase experience. That can include a better interface when it comes to shipping, more detailed text updates, and then of course options to return products and buy new ones. Those updates can even also be incredibly granular, down to where storms are halting packages, CEO Amit Sharma said. The goal, he said, is to make sure customers stick around instead of having to acquire new ones.
There’s a good reason for that: it’s cheaper to hold onto a customer post-purchase than it is to acquire a new one, Sharma said. Prior to starting Narvar, Sharma spent a few years managing the delivery experience for Apple.com, and before that managing supply chains at Walmart. Using tools to improve the post-purchase experience can improve customer retention by 10 times, he said. An improved post-purchase experience can also reduce overhead like support call volume.
“I spent almost a decade with multi-channel retailers, all of these brands, maintaining a customer relationship — that experience is outsourced to other companies, and there’s no opportunity for retailers to engage with customers post-purchase,” he said. “As the ecosystem is changing, everything getting squeezed. It is extremely important to continue to have a relationship post-purchase. It’s cheaper to retain your customers, and they’re spending more with you.”
If that’s successful, Narvar users are able to start the whole purchase experience from the start, from awareness all the way down to conversion to a sale. In that sense, it essentially moves a customer from the bottom of the marketing funnel where they’ve made a purchase all the way back up to the top, where they are discovering new products thanks to an improved post-purchase experience.
But just because Narvar already works with brands like Nordstrom and Anthropologie doesn’t necessarily mean it will succeed. These companies could choose to own the post-purchase experience on their own, much in the same way Amazon does with its shipping tracking, and services like Gmail already simplify those organization elements even further. The bet Narvar has to make is that it can build an experience that goes beyond simply keeping track of their packages.
So where do “buy” buttons fit into all this? Commerce is increasingly moving to platforms like Pinterest and Twitter, with Pinterest most-recently launching Buyable Pins — a way to buy products directly from within Pinterest. Those sites used to direct traffic to third-party retailers, but now those retailers are being relegated back to being a “glorified warehouse,” Accel Partners’ Brian O’Malley said. The trick now, he said, is to turn the post-purchase experience into one that drives those customer relationships.
“Traditional e-commerce systems, they think about a customer journey ending at hitting buy, and the reality it starts at buy,” he said. “And their opportunity is how well they serviced them all the way through the package being shipped, returned, and the challenges along the way. If you think about everything that happens from an initial click or an eyeball to that buy button, that space has gotten really crowded, theres hundreds of companies trying to optimize every knob. On the flip-side there’s been very little innovation post-purchase.”
Narvar launched in 2010 and before this had raised $2 million in seed funding. It’s now raised $12 million total.