Why Fashion Ecommerce Is Embracing Claims Automation
What's more annoying for fashion e-commerce than frequent returns? Lost shipments.
The fashion industry depends on reliable deliveries, with e-commerce accounting for one fifth of all fashion purchases worldwide. Fashion e-commerce is also consistently the most popular online shopping category in the UK, EU, China and US. In 2024, for example, almost half (46%) of EU internet users bought clothes, shoes or accessories online.
However, the surge in online fashion orders has led to a spike in delivery issues - from loss in transit and damaged parcels to delayed shipments and doorstep theft. Now, thanks to automated courier claims, the fashion industry is fighting back. Here's why.
1. Compensation for lost orders
An estimated 1% of worldwide shipments are lost in transit - be it through technological issues or physical errors - but the reality is much higher. In the UK, 6.5% of deliveries encounter an 'issue' during an average month. In peak season the likelihood of lost packages jumps by 31%.
When you factor in modern customer expectations (i.e. fast and free delivery), increased order volumes (i.e. Asos alone shipped 67 million orders last year) and greater courier competition (i.e. there are 15,000+ couriers in the UK), it's no surprise that even major couriers are struggling with successful deliveries.
These unfulfilled deliveries have a devastating impact on fashion e-commerce retailers - leading to lost revenue today and lost custom tomorrow (through unhappy customers). But automated courier claims can swing the dial back in fashion's favour by claiming compensation for lost orders and generating huge savings. For example, Sportswear retailer Sigma has saved over £240,000 since using Claimit.
2. Offset the cost of returns
Returns are part and parcel of e-commerce - but fashion is particularly hard hit. Thanks to style/fit challenges and purchasing trends like bracketing, the concept of 'buy, try and return' is more commonplace in fashion than any other online shopping category. In the UK, for example, clothing (27%), shoes (15%) and accessories (14%) top the return rates for online orders.
These returns not only incur significant costs for fashion retailers (A CBRE study found the average parcel return costs £20), but takes up valuable staff time processing and re-stocking the items. To make matters worse for fashion retailers, 65% of online shoppers expect free returns in all circumstances, so there's huge pressure to offer free returns to stay competitive - despite the costs.
The solution? Offset the cost of returns with claims compensation. For instance, fashion brands are recouping up to 15% of their total shipping costs using Claimit - savings that can cover the costs of a free returns policy.
3. Retain customer loyalty
While online shopping is expected to generate over £1 trillion per year for fashion brands by 2027, the rise of internet selling has also flooded the fashion marketplace with new (and often cheaper) competitors from across the globe. As such, it's even more important for fashion brands to retain customer satisfaction and loyalty.
But lost and damaged shipments lose customers. Despite being the fault of the courier, 52% of shoppers hold the retailer responsible for delivery issues and 24% refuse to make a purchase again after a bad experience.
Courier claims platforms like Claimit not only flag (and often resolve) potential shipping errors in advance, but enable you to warn customers in advance and avert a bad experience by either resending the item or using claims compensation to offer discounts.
As claims are automated it also frees up your customer team's time to focus on the customer. For example, women's fashion brand Oh Polly saved 60% time since using Claimit.
Fashion and claims automation: the perfect fit
From fashion industry titans Frasers Group to women's clothing specialists Oh Polly, fashion brands make up the largest segment of Claimit users.
While automated claims for lost and damaged shipments can benefit a wide-range of e-commerce sellers, the unique characteristics and sheer volume of online fashion orders makes it the perfect fit for courier claims automation.
Book a demo to find out how much Claimit could save your fashion brand.
