Varusteleka loyalty with RePack reusable packaging

Varusteleka X RePack loyalty boost

How RePack boosts customer loyalty

Varusteleka (pronounced [Where's the liquor?]) is a Finnish outdoor activity and army surplus store. The company was established in 2003 and has become the biggest army store in Europe. Varusteleka has 55 professional members and with a turnover in 2017 of 12.4M €.

Varusteleka takes pride in their skill and experience, and you will have a hard time finding a military surplus store better than Varusteleka.
RePack at Varusteleka.com - In practise
Back in 2013 Varusteleka had just been selected as “Best webstore in Finland”. We, on the other hand, had one customer and our packages failed to meet their needs.

Here’s a case study how our collaboration started with a co-design project on packaging.
RePack as an option to begin with
From the beginning of our relationship RePack has simply been an option in the Varusteleka checkout.

Customers have simply paid a fee for RePack with a promise of money off next purchase once empty RePack was returned.

We have adjusted the pricing, collected feedback, checked the statistics, engaged in the promotion, carried out campaigns, changed the packaging. We’ve tried a lot of things.

Still, studies with Hanken School of Economics showed 30% of Varusteleka customers were not even aware of the RePack option at the checkout. We were puzzled.
RePack users have twice the average order value
Loyalty has never been an issue at Varusteleka. A happy customer is their number one goal. Everything else is a result of making their customers happy.

Having said that, it’s still quite amazing that once the empty packaging has been returned 60 % of Varusteleka’s RePack vouchers are claimed and 6 % of Varusteka’s voucher use comes from other RePack using stores.

Also, their RePack users have a 120% higher average order value compared to a regular Varusteleka shopper.

(We’re not saying RePack is the cause for average order value to double. It may have an indirect impact, sure, but it’s more likely that RePack resonates with their best customers.)

All this results in an interesting figure. According to third-party software used by Varusteleka - Custobar - RePack users have 69% higher customer lifetime value to regular customers.

Needless to say, Varusteleka’s sets the benchmark for other RePack using customers.

But we wanted more Varusteleka customers to find out why RePack makes sense.
Campaign - RePack as part of loyalty program
In spring 2017 we introduced an idea with the objective of increasing average order value together with a combined RePack offering. Varusteleka introduced RePack as part of their loyalty program.

The idea was simple.

If a customer was a member of Varusteleka loyalty program and bought for more than 79 € their order would be shipped in a RePack.

Why 79 €? The main reason was that Varusteleka’s average order value was 55 €.

After a three month campaign, it was time to analyze the results.
Cost effective campaign, increased average order value & less trash
Numbers showed that the campaign generated new sales worth 36,000 € while increasing the average order value by 14 €. Cost of the campaign was 7,000 € so all in all offering RePack as part of a higher average order value was very successful.

Below a screen caption (in Finnish) where campaign time is greyed out. Blue line clearly illustrating the campaign impact on average order value and total sales during June-July-August.
The campaign proved that RePack does not just correlate with higher average order value but when offered to customers for free, above a fixed order value, it has a direct impact on average order value.

This does not exclude offering RePack as an option in the checkout for a fee, making it cost-neutral for Varusteleka.

In fact, a combination of these two gives the best of both worlds. A tool to increase average order value while offering an option to customers who value the convenience of returnable packaging or simply do it to save money.

This campaign helped us crystallize our thoughts on RePack’s value proposition: RePack is a tool to increase customer value while enhancing the green credentials of the company, and saving the world from drowning in packaging trash.

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