12 jul 2023
Kelli is the senior content strategist for Order Protection.
If you run an eCommerce business, you’re likely all too familiar with shipping issues. But when you think about the cost of shipping damage, what comes to mind? The cost of the damaged product, or perhaps even the carrier’s shipping and handling fees?
The reality is, the full cost of shipping damage goes a lot deeper than that. When a product you’ve sold to a customer gets damaged during the shipping process, your brand can experience:
Impact to your business’s bottom line when replacing or refunding damaged products
An excess of time and resources spent on customer service to resolve the issues
The possibility of losing that customer’s lifetime value
Potential damage to your brand’s reputation, especially depending on how the issue is handled—and if you start racking up a lot of negative customer reviews, it can affect future sales
The takeaway here is that shipping issues can significantly impact customer satisfaction and by extension, your brand’s bottom line. Ensuring that products arrive safely and on time is essential to both your business, and the customers buying from your store. One easy way to cover your business for unexpected shipping issues and build trust and loyalty among your customers is by offering shipping protection.
In this article, we’ll dive into the benefits of shipping protection, and why investing in the service is a smart move that can lead to improved customer satisfaction, financial security, and a competitive edge.
Understanding shipping protection
Before we explore the benefits, let's take a moment to understand what shipping protection entails. In eCommerce, shipping protection refers to insurance or guarantees provided by merchants to protect against loss, damage, or any other issues that may occur during transit. It acts as a safety net, offering peace of mind to both sellers and buyers.
But let’s get more specific for a second. We’re going to look at examples of how shipping protection can benefit merchants and customers alike.
The benefits of shipping protection for merchants
Financial security and risk mitigation
We probably don’t need to tell you this, but running an eCommerce business comes with its fair share of risks. When dealing with everything from online security risks to supply chain issues, the last thing your brand needs is an excess of shipping-related risks. Shipping protection helps merchants mitigate those risks and provides financial security.
According to a study by ShipStation, 85% of customers expect merchants to take responsibility for lost or damaged packages.
As a retailer you might think, “but it’s usually the carrier’s fault when a package is lost or damaged.” Even if in most cases this is true, the same study found that 70% of consumers say that a bad delivery or shipping experience negatively impacts their impression of the retailer rather than the carrier. So even if the delivery driver lost a customer’s package, the way the brand responds to the issue will ultimately be what sticks with the customer long-term.
With a shipping protection service, customers opt-in to protect their orders at checkout. So if their package is lost or damaged in transit, their purchase is covered and the brand isn’t left footing the bill. By investing in shipping protection, merchants can avoid significant losses, preserve their reputation, and ensure their bottom line remains intact.
Enhanced customer satisfaction and loyalty
Reliable shipping plays a vital role in customer satisfaction. When customers make a purchase, they not only expect quality products but also a smooth and hassle-free shipping experience. Shipping protection helps merchants deliver on those expectations.
In fact, a survey conducted by Dotcom Distribution found that 87% of customers are more likely to purchase from a retailer again if their shipping experience was positive. And, as we noted in a previous article, data shows that almost half of all sales (41%) are generated by satisfied, repeat customers. You can probably see where this is going: happy customers who had a great shipping experience are more likely to become repeat customers, and repeat customers bring in almost half of all sales. By placing a focus on your shipping experience and providing shipping protection, you can offer peace of mind to your customers and foster loyalty.
Competitive advantage in the eCommerce industry
eCommerce is a saturated industry, and the competition is fierce. Standing out from the crowd and differentiating your brand is crucial. Offering shipping protection is one way to give you a significant edge over your competitors—it shows your commitment to customer satisfaction and positions you as a trusted choice.
Recent studies have shown that 78% of customers would actually be inclined to spend more with online brands if offered protection or warranties and checkout. So not only are you able to use shipping protection as a competitive advantage, but you can actually see increased average order values at the same time.
The benefits of shipping protection for customers
We’ve touched a little on how the benefits that merchants see from shipping protection can benefit consumers as well, but let’s look at some examples of how the service specifically boosts the shopping experience for customers.
Peace of mind and reduced anxiety
Shopping online is so commonplace today that it’s easy to forget there’s quite a bit of risk involved in putting your credit card information into a browser, clicking “submit,” and hoping that what you just paid for will actually get to you safely and as promised.
When your brand provides shipping protection, it’s an acknowledgement that your customers are placing trust in your company to deliver on the products they’re buying from you, and you want those packages to arrive safe and sound. Shipping protection provides peace of mind, allowing your customers to shop with confidence knowing that they’re covered for loss, damage, or even theft. Because even if the packages arrive on their doorstep, there’s still no guarantee that the customer will receive the items.
You know we had to bring it up: porch piracy is a scenario that happens more often than it should, and shipping protection can ensure that even if a customer’s package is stolen, they can be refunded or receive a reshipment at no additional cost to them (or your brand).
Convenient claims and hassle-free resolutions
In the event that something does go wrong during the shipping process, the last thing you want to do is make getting a resolution a difficult or unpleasant experience for your customers. At a time where they’re already frustrated, they need a quick and easy way to resolve their issue.
With shipping protection in place, customers have an easy way to submit claims and receive quick, efficient communication from expert agents. With Order Protection, customers receive responses and resolutions within minutes. Research shows that this kind of convenient claims and resolution process is important to consumers—a survey from Shippo found that 63% of customers said they would be more likely to shop with an online retailer that offers hassle-free returns and shipping protection.
Improved customer experience and satisfaction
A positive customer experience is the cornerstone of eCommerce success. Shipping protection plays a vital role in ensuring that experience is exceptional. By providing reliable shipping and protection against unforeseen events, you can meet delivery expectations and reduce the chances of delays or mishaps, leading to increased customer satisfaction and a higher likelihood of repeat purchases.
5 eCommerce shipping best practices
To optimize your shipping operations and make the most of your shipping protection investment, consider the following best practices:
1. Proper packaging and labeling
Take the time to package your products securely and label them correctly. This helps minimize the risk of damage or misplacement during transit. Use appropriate padding, sturdy boxes, and secure seals to protect the items inside.
2. Choose reliable shipping carriers and services
Research and select reliable shipping carriers with a track record of timely and safe deliveries. Look for carriers that offer tracking services and additional insurance options to further protect your shipments.
3. Track and monitor shipments
Utilize shipment tracking tools provided by your chosen carrier or third-party software. This allows you to keep both yourself and your customers informed about the progress of their orders. Proactively communicate any delays or issues to manage their expectations and maintain transparency.
4. Reliable communication and transparency with customers
Regularly update your customers on the status of their shipments. Provide tracking information and send notifications when the package is out for delivery. Be responsive to customer inquiries and concerns, ensuring clear and timely communication throughout the shipping process.
5. Offer a variety of shipping options and insurance
Offering various shipping options to cater to your customers’ needs shows your brand’s dedication to a flexible, customer-focused experience. Include expedited or premium services for those who require faster delivery. And, of course, consider offering shipping insurance or protection as an optional add-on during the checkout process. This empowers customers to choose the level of protection they desire for their orders.
Is shipping protection worth it?
Like insurance, shipping protection is one of those products or services that only comes into play when something goes wrong. But anyone who has found themselves in a situation where insurance swoops in to save the day knows: it’s worth it.
Ultimately, it’ll most likely be up to the customer whether or not they want to pay for protection (if your brand decides to offer the service). But let’s take a look at a few factors to consider when deciding whether the service is worth the investment for your brand.
Weighing the costs and benefits
While there may be a financial investment involved, the potential benefits of shipping protection far outweigh the costs. The financial security it provides, along with the positive impact on customer satisfaction and loyalty, make it a worthwhile investment for your business.
Calculating potential savings and ROI
Consider the potential savings from avoided losses due to lost or damaged shipments. Factor in the reduced customer churn and increased repeat purchases resulting from improved customer satisfaction. Calculate the return on investment (ROI) based on these metrics to assess the financial impact of shipping protection on your business.
Start seeing the benefits from shipping protection today
By investing in shipping protection, merchants gain financial security, enhanced customer satisfaction, and a competitive edge. Customers, on the other hand, enjoy peace of mind, convenient claims processes, and improved overall shopping experiences. And, in addition to offering protection, implementing best practices such as proper packaging, reliable carriers, and transparent communication, can further enhance the shipping and post-purchase experience.
Shipping protection is no longer an option but a necessity. Prioritizing this level of service helps brands deliver exceptional customer experiences, build trust and loyalty, and sets them apart from the competition. It's not just about the products you sell, but also how you deliver them that can make all the difference. Reach out today to learn how your brand can invest in shipping protection and start seeing the benefits.