Move over, wholesale clubs! There’s a new kid on the premium loyalty block.
The name’s Boxed, an online and mobile wholesale retailer. Boxed offers direct delivery of bulk-sized packages via the Boxed app or website.
It’s like shopping at a wholesale club without the need to leave home and without the membership fees. The best part? Shipping is free on the first order and all subsequent orders over $49. And most orders arrive within two business days.
But things got even better on April 9 when Boxed launched a new premium loyalty program called Boxed Up. Here’s how it works:
For an annual $49 fee, customers receive:
- Free priority shipping on orders over $20
- 2 percent cash rewards
- Exclusive deals & gifts
- VIP customer service
- Special deals at Boxed Hotels
- Other special deals on products from Pepsi, Keurig, and more
If Boxed Up sounds somewhat similar to Amazon Prime, the gold standard for premium loyalty programs, that’s because the strategy is the same. Listen to your customers. Boxed Up is all about increased engagement with the company’s best customers. It’s not about stealing them from Amazon.
We reached out to Helen Pan, Director of Loyalty and Customer Experience at Boxed. She had some fascinating insights about the newly launched program.
“We definitely looked at Amazon Prime given its success over recent years,” Pan explained. “We also looked at popular loyalty programs across retail and outside of retail when shaping our program.”
Listening Paves the Way for A Better Customer Experience
Listening to its customers was the vital piece for Boxed as it researched, designed, and launched Boxed Up.
“If we have learned anything from our research, it is to design with our customers in mind and work both internally and with our partners to offer differentiated perks and, in the near future, experiences,” Pan added.
Boxed offers lower than retail prices on bulk items due to exclusive deals it has with brands.
Boxed officials wanted to offer their customers a premium service. They wanted to reward them with perks and promotions for shopping on Boxed.
“With Boxed Up, we’re answering our customers’ requests for more and bigger perks at Boxed,” Pan said. “We’re hoping that Boxed Up drives increased engagement and repeat purchase, both in the near term and long term.”
A Premium Loyalty Model as a Differentiator
The paid membership, or premium loyalty, model is picking up steam as brands seek greater differentiation in the marketplace.
Premium loyalty programs reverse the traditional model. The focus is placed on the customer and not the brand. For an upfront membership fee, customers enjoy enhanced benefits and an elevated value proposition. When done right, a premium loyalty program is meant to enrich the lives of a brand’s best customers.
“In our view, premium loyalty programs allow for continual testing, optimization, and personalization,” Pan explained. “With the way that we set up Boxed Up, we have given ourselves tremendous flexibility to offer the perks our customers truly value and to evolve over time as our customers evolve.”
Success in Bulk
Boxed has enjoyed bulk success in a relatively short period of time.
The company launched in August 2013. Grade school friends Chieh Huang, Christopher Cheung, and William Fong, along with Jarad Yaman, came together to build the first mobile app that allows customers to shop wholesale products on-the-go and without paying wholesale club membership fees.
The idea was born when Huang, at the time a new father living in Manhattan without a car, did not have the same ability to shop at wholesale clubs as he did while growing up in New Jersey. With their background in mobile gaming, the team created an easy-to-use, intuitive app for iPhone and Android, and several months later, launched the Boxed website.
The company first started shipping out of Huang’s garage in Edison, N.J., before opening its first fulfillment center, also in Edison, in December 2013. In less than three years, Boxed went from $40,000 in sales to a staggering $100 million!
What’s more, in June 2016 Internet Retailer named Boxed Emerging E-tailer of the Year. That same year Boxed was named one of the Best Places to Work in New York City by Crain’s New York Business and Best Companies Group.
Boxed has four fulfillment centers based in New Jersey, Georgia, Nevada, and Texas. This allows orders to be delivered within two days. The company also has a support office in San Mateo, CA.
Given Boxed’s meteoric rise in a relatively small window of time, its future looks bright. It makes listening to customers a top priority. The Boxed Up premium loyalty program will provide further differentiation by offering meaningful benefits and added value.