In just the first quarter of last year, Americans spent an astonishing $252 billion online, and by the end of the year, e-commerce comprised 16.7% of total retail revenue across the country.1

Figures like these continue to progress inexorably upwards, showcasing a situation that’s unlikely to change any time soon, especially given that large Chinese retailers – Temu the latest to join the crowded market – look set to expand into the US.2

Yet, there is a darker side to the ease and convenience of online shopping that’s becoming more apparent to many consumers. In 2022, around 260 million packages were stolen at the point of delivery, so-called porch piracy.3

For retailers, that value of losses totaled around $20 billion of lost products. Whether they’re responsible for it or not, porch piracy is a problem that reflects on the retailer, as many customers don’t distinguish between the seller and the delivery service. This can significantly impact the brand’s overall customer experience, leading to a series of adverse effects on retailers’ operating costs: customer service, inventory, logistics, and marketing.

Source: Route

Millions of shoppers affected directly or indirectly by the problem are increasingly opting for shipping insurance at checkout to cover their packages, and many pay extra for what they hope will cover them in the event of theft or damage.

What consumers and retailers need to realize, however, is that many of the  ‘package protection’ solutions offered can be from fraudulent operators drawn to what they see as a lucrative opportunity. Under false assurances, when things go missing, both merchants and shoppers are left on the hook for issues that come up, with little hope of compensation. 

Oklahoma and Utah have issued written guidance confirming that legitimate package protection offerings must include the involvement of a licensed insurance producer. The need to include a licensed insurance producer is not unique to Oklahoma and Utah. All state DOIs provide access to state databases identifying such licensed producers.

As the volume and value of online retail continue to grow, so will the demand for package and delivery protection. Illegal package protection services create risks for individual retailers and the e-commerce industry as a whole. Fraudsters’ illegal offerings can ruin businesses’ reputations and eat into already tight profit margins, lowering repeat business revenues and creating public relations nightmares for retailers. 

Companies have a responsibility to select an insurance service with due diligence. A genuine package and delivery insurer complies with the intricate rules and regulations of multiple states’ insurance markets, acting as the face of the retailer if an order goes missing. 

A legitimate option like that offered by Route is the key to solving the growing issue of bogus package insurance. It gives retailers and customers peace of mind that missing items will be replaced easily as part of an overall service that creates a class-leading post-sale customer experience.

Customers shopping at retailers using Route benefit from real-time delivery tracking and delivery options that enhance purchasing experiences–allowing smaller companies to compete with the customer service expectations consumers now have from behemoths like Amazon. 

To put the impact of using Route into perspective, Solo Stove – a popular fire pit company – was running into major customer service issues trying to ship large, easily damaged metal fire pits. Since implementing the Route platform, it has saved thousands of dollars in out-of-pocket insurance premiums, reduced claim-related customer service tasks by 92%, and increased buyer satisfaction metrics by 10%.

Route ensures deliveries, and its tracking capabilities also allow customers to minimize the time packages are left unattended, lowering the risk of theft. Route-tracked and insured deliveries can also be carbon offset, a feature we covered in more detail in this article[ed. please link to previous article]. Using Route, companies can ensure their brand is synonymous with reliability, safety, and sustainability.

Book a demo of Route to eliminate the risk of fake package insurance, improve brand identity and customer experience, and lower costs in multiple areas of your retail business.

1 https://capitaloneshopping.com/research/online-shopping-statistics

2 https://www.businessinsider.com/temu-opens-its-marketplace-to-us-based-sellers-2024-3

3 https://www.cnbc.com/2022/12/18/porch-pirates-stole-an-estimated-260-million-packages-in-2021.html

The post Fake package insurance’s threat to the e-commerce industry appeared first on TechHQ.

It is predicted that the e-commerce industry will produce 25 million tonnes of carbon dioxide emissions by the end of 2023, a statistic that should not come as a surprise. Online retail has skyrocketed since the pandemic, bringing retailers over $1 trillion in 2022 alone. According to the International Trade Administration, online e-commerce sales share is projected to increase from 16 percent of the total global retail market in 2021 to 22 percent in 2025. The logistics and transport sector, which e-commerce directly connects to, contributes just over a third of global emissions and is the largest-emitting sector in developed countries.

As both the e-commerce and logistics industries’ growth shows no sign of slowing down, decision-makers must focus on implementing sustainable practices and solutions to mitigate the environmental impact.

Source: Route

Evan Walker, the founder of  Route, the industry leader in post-purchase experience and package protection with carbon neutral shipping, told TechHQ: “Making the industry more sustainable is not just a moral imperative—it’s a necessity. As e-commerce continues to thrive globally, it becomes increasingly crucial to reduce its environmental footprint. Sustainable practices not only align with our responsibility to the planet—and what consumers are starting to demand—but also contribute to the long-term viability of the e-commerce sector.”

Indeed, achieving sustainability in an industry that relies on transport is not simple. Logistics optimization, packaging waste, and energy consumption are all hurdles to environmentally friendly operations, according to Mr. Walker.

He said: “Striking a balance between sustainability and operational efficiency while considering cost-effectiveness poses a complex challenge for the industry. Overcoming these obstacles requires innovative solutions.”

These challenges are why Route developed a simple solution that allows e-commerce businesses to reduce their carbon footprint significantly. Brands can give their customers the option to offset the emissions associated with their orders with just one click at checkout.

When an order is placed, the app calculates its CO₂ emissions and can make an equivalent donation to one of its certified sustainability projects. As a result of supporting a project, the emissions associated with the order are neutralized.

Mr. Walker said: “Shipping is a significant contributor to e-commerce’s environmental impact, and direct efforts to reduce emissions are paramount. By integrating sustainability practices, the industry can mitigate its carbon footprint, contribute to environmental conservation, and address the urgent need for climate action—which also aligns with what consumers want to see brands do more.”

Sustainability projects that Route supports include the Freres Biochar Project in Oregon, where ‘biochar’ (a type of charcoal produced from biomass) is generated by its lumber operations and used in agriculture and environmental applications, such as soil improvement, carbon sequestration, and sustainable farming practices. The wood waste would otherwise be disposed of—typically by burning—and pollute the environment. The equivalent of approximately 2.64 tonnes of carbon dioxide emissions is removed per tonne of biochar produced.

The initiative also supports the Indus Delta Mangrove Restoration, which aims to rehabilitate and restore the mangrove forests in the Indus River Delta region of Pakistan. The mangrove ecosystems in the Delta have degraded due to human activities in the last 50 years. Replanting these important trees is expected to sequestrate the equivalent of 142 million tonnes of emissions over the next 60 years.

“By choosing projects carefully, Route guarantees that our carbon offset contributions genuinely contribute to reducing carbon dioxide emissions and align with our commitment to sustainability,” said Mr. Walker.

For brands that sign up for Route’s Basic plan, carbon-neutral shipping is included on orders covered by Route Package Protection, where Route also refunds or replaces items that are lost, stolen, or damaged. Brands using Route’s Pro or Custom plans will have their emissions offset on all of their orders.

LoveShackFancy, Beis, and Solo Stove are among the thousands of Route’s 13,000 brand partners that offset their shipping emissions and are actively building a more sustainable e-commerce industry. As of December 2023, Carbon Neutral Shipping has neutralized the emissions from 35 million shipments and is projected to remove over 55,000 tonnes of carbon dioxide annually. Route itself is on track to becoming fully carbon neutral by 2025.

Source: Route

The platform presents an unparalleled opportunity for merchants to revolutionize their post-purchase customer experiences, in addition to their sustainability commitment. Brands can retain revenue with premium package protection, reduce support tickets with immersive package tracking and with Route’s issue resolution, and boost sales with personalized product recommendations.

At its core, however, Route prioritizes its environmental  mission. Mr. Walker said: “Sustainability is a game-changer for the future of e-commerce. As consumers increasingly prioritize eco-friendly practices, the businesses that integrate sustainability will stand out.

“To put it in perspective, 87 percent of buyers will purchase a product because its company advocated for an issue they cared about, and 77 percent of companies surveyed found that sustainability leads to brand loyalty. Using Route, companies can ensure their brands are synonymous with sustainability initiatives that make an impact on the global community.

“We actively engage with partners in various industries, fostering collaboration for a greener e-commerce future. As Route grows, so will our ability to implement and expand initiatives that contribute positively to the planet.”

If you are interested in making carbon-neutral shipping part of your brand identity and contributing to a greener future for the e-commerce industry, book a Route demo today.

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