Imagine buying Costco-sized bulk items online. That’s the proposition of ecom startup Boxed. But while competitors like Amazon offer thousands of items associated with a single search, Boxed offers just a handful.
As a newcomer, Boxed’s challenge is acquiring more customers while keeping customer acquisition costs in check. So Boxed is doing local, geo-targeted marketing.
Over the summer, Boxed tested its local strategy in Dallas, sponsoring a local food festival and doing giveaways at SoulCycle.
Boxed was specifically targeting a certain segment – the “cool mom,” known colloquially within Boxed as “Jen.”
Jen tends to be one of Boxed’s best customers, worth multiples more than an average customer in terms of revenue, repeat orders and high-value shopping carts.
“These audiences tend to be saturated in certain cities,” said Boxed CMO Jackson Jeyanayagam. Besides Dallas, this persona, COOs of both households and companies, tends to congrate in San Diego and Houston. “Saving money is important, but it’s less important than saving time, if she’s getting value and time back with her family.”
During its Dallas activation, which included direct mail, local PR campaigns and local influencers, Boxed collected email addresses so it could continue the conversation online by running geotargeted search ads and Facebook ads.
By focusing on a single market, Boxed hopes that it can spur more word-of-mouth, as locals see Boxed on their neighbors’ doorsteps. “Referral is so critical in this day and age of acquisition marketing,” Jeyanayagam said.
The program worked. When doing on-the-ground events, Boxed can see the impact when people use custom discount codes by event, what email addresses converted, and lift in branded search.
Ultimately, the new customers in Dallas tended to be high-quality customers, Jeyanayagam said, based on the size of their initial shopping cart.
“We didn’t have to spend millions of dollars on a big flashy campaign,” Jeyanayagam said. But long-term value is still TBD: “The question will be, over time, how do they perform?”
With the local approach, Boxed spent more on digital to geotarget campaigns.
“Digital is more efficient on a national level than a local level,” he said. “You are spending a lot more for less people.”
But local marketing serves a role in creating “surround sound,” he said, by reaching customers already primed by an experience with the brand. The higher CPMs can pay off by bringing in qualified, quality customers – netting out with better long-term value and lower customer acquisition costs.
Based on the strong results in Dallas, Boxed is seeking to gain scale by entering more markets in Q1. The marketing team will use direct mail, out of home, local radio, influencers PR and search advertising in order to reach consumers in concentrated geographic areas, as the marketing team continues its quest to convince more “Jens” to try Boxed.