#237: Cutting Your Shipping Losses with Kyle Rooney, Partnerships Manager at Route

Hey, it's episode number 237 with a tool that you may or may not know about yet, but I can't wait for you to. It's with my friends at Route. Let's talk about your business strategy and the juicy details of what actually works from mainstream fashion to fashion on Main street and the entire ecosystem behind it. How do we scale your company and do it with the balance and the happiness that we all seek? Let's hear from those insiders, experts and strategists that actually make it happen. I'm your host Ashley Alderson from the Boutique Hub and I can't wait to chat. All right, you guys, have you ever had this nightmare happen? If you are an e commerce business where your customer has ordered a package but all of a sudden emailed you saying the package is nowhere to be found and they're thinking it's your fault and your tracking is showing that the package is delivered. Now. Did the dog eat it? Did the neighbor next do steal it? Did the postmaster happen to be your same size and fashion taste? I don't know. But unfortunately it's one of the biggest customer service headaches that any e commerce business is going to face. So I'm really excited today to introduce you to a tool, if you don't know them already, a brand new partner of the Boutique Hub who we've heard awesome feedback with and that's our friends at Route. Today, Kyle, who has been a part of the fast growing team at Route, is going to talk to us about what this tool is, how it works, how it alleviates stress for not only you and the consumer, but also if you are a wholesaler, how Route might also benefit you knowing that those seven, $800 packages, thousand $2000 packages, are just as important as any package that you ship your end to end consumer. So guys, please help me welcome my friend Kyle. Today we're going to talk about how this tool is changing how we think about shipping. Hey guys, welcome back to the podcast this week for those of you who are in e commerce, this is the episode for you to take some notes. So guys, welcome this week to the show my friend Kyle Rooney, who is the partnership manager at Route. Kyle, welcome to the show.

Thank you for having me. Very, very excited to be here. I'm excited to kind of dive into this with you.

I love the fact that on the show we get to talk about new solutions or new strategies or new big ideas that are coming to the industry and how boutique owners can take advantage of them so that's going to be the topic today, isn't it?

Yes. Yeah. There's a lot happening in E commerce and services like Route are trying to help lift some of the, I would call minutia or headache from boutique owner's plates.

Absolutely. So let's start here. Tell me, if someone is not familiar with Route, what is the big problem that you solve?

Yeah, for sure. So the main issue, right, it's 2019 packages are all being shipped through like the main four carriers, right? UPS, USPS, FedEx and like DHS probably. And as E commerce grows year over year, there's more and more shipping issues. Right. Packages aren't showing up and unfortunately that reflects negatively on the brand. You do your best as a website owner to create this awesome experience. You pay to get traffic to your site. You know, they have an awesome brand experience purchasing on your site and then, you know, customer hit submit and then it's out of your hands. So Route really is a solution to kind of bring some more control back into, you know, a merchant's hands.

That's awesome. So talk to me about like the old way versus the new way. I know that so many people listening have had that nightmare situation where they get an email from a customer saying, hey, where's this package? It never arrived and tracking says that it should have.

Yeah, that's the worst email you can get, right? You upheld your end of the deal, the customer paid and it was somebody else's fault. So yeah, the old way kind of how most people deal with it. You know, I talk to a lot of merchants every day and it's, you know, I'll hear Kyle, oh, you know, we already have insurance. I'm like, oh, like how do you, how do you typically insure? And like, oh, well, you know, we ship with USPS and they give us, you know, $50 or $100 in free shipping insurance and you know, we'll talk about that. I'm like, okay, you know, talk me through customer calls, you, package doesn't show up, it says delivered. What do you have to do? And they, you know, typically they laugh like, oh, well, I have to, you know, get on the phone and reach out to the carrier and I spend 30 minutes on the phone call and then they tell me I have a 17 to 14 day resolution time. And you know, then the merchant gets caught in between a rock and a hard place of do I provide good customer experience by just eating the loss and sending a new product to my customer in hopes that FedEx or UPS or the carrier takes care of me or do I make my customer wait until I've kind of been approved and know that I won't have a loss on this package. But either one is kind of a lose lose because the merchants either out the money or the customer has to wait 17 to 14, maybe up to 30 days for a resolution man.

So it makes such a huge impact because now what you're doing is you're putting the power in the consumer's hand and saying, hey, rather than the retailer have to deal with this headache, the consumer chooses at checkout if they want to have insurance and now it's in their hands. Correct?

Yeah, yes, absolutely. Right. We didn't, you know, reinvent the wheel here. We just kind of made it a better experience. Right. So we instead of the merchant covering the, or the carrier covering the, like covering the package with like free insurance, the customer. Exactly. They have an option at checkout to purchase insurance. Kind of that journey for a customer looks like this. They purchase route for either $0.98 if the package is under $100. Above $100 is about 1% of cart value. And they'll receive an email from route that says essentially, you know, once they purchase route, if your package is lost, damaged or stolen, file a claim here. The claim takes, I think if you're typing slowly takes 60 seconds. It's only like seven or eight fields. And when you hit submit, our team reaches out to you in within 24 hours. The kind of cool part is if you're in, if it's domestic, I mean it's closer to six. We have a really, really good response time. And then over 50% of those claims are handled with one touch. Meaning our representative get back gets back to you and says, so sorry this happened. We repurchased, you know, this shirt in green and it's, here's the new order confirmation number. It'll be at your house in X amount of days. Customer doesn't have to do anything, they don't have to wait and they, and they get it taken care of easy and fast.

That's awesome. Do you, do you find when a boutique, say just starts to use route on their e commerce site, do you think there's like an education period or what are some of the best practices that you've seen boutiques use to onboard their customers to understand that routes and option and how it works?

Yeah, so there is definitely an education piece. And as we're growing and evolving, you know, we have more like a bigger knowledge base and during onboarding it kind of gets into the details a little bit more of how would you like us to. It's a new feature that's rolling out and onboarding. I should say that. So, you know, how would you like us to work with you and your customers? So kind of to take a step back, let's say a customer. So what we see is about 75% of the time a customer files a claim because they purchased route, they'll actually reach out directly to us. They'll remember they got the email and they'll kind of do what I call self serve and our team will just take care of it. And it completely goes around the merchant and they don't have to worry about it. The other 25% of the time, typically we see customers reach back out to the merchant. So back to the boutique and say, hey, my package never showed up. I purchased route. The boutique owner has a few different tools they can use to resolve this issue first, which is easy. They can be like, hey, you actually received an email at checkout. You can go file a claim with that button 2 in the dashboard that you onboard with. There's actually. You can look up the order number and there's a. You can file a claim from the dashboard on behalf of your customer. For the boutique owners. So say it's maybe a more high touch customer. They're really upset. You don't want to do a pass to our team. Totally fine. You can just file a claim on behalf of the customer. And then the third way is you can just have them reach out to us@supportout.com so, you know, and then it's. There's a little bit more communication. Right. We'll have to figure out all the information that the claim. But the claim form is asking for. But you know, we do everything we can to alleviate. Alleviate that. CS time for the boutique owner.

Awesome. That's a big deal. I feel like, and I'm sure every boutique owner listening feels like there is this black hole somewhere at USPS where everybody's lost and stolen packages go. So that's pretty, pretty cool. Do you. I know you're on Shopify. Are there other verticals or not verticals, but platforms that you are integrated with as well?

Yeah, so we are integrated. We have a Magento 1 and 2 extension and then we have a WooCommerce plugin. It's actually in beta and so there's a few little last tweaks. And I know that we're in the store already, so if you search us, you'll find us. But that's our beta version, but that should be done here in the next few weeks. And then we also have just API docs. So any platform that you're selling on that you can insert API calls to without getting too technical, you can offer Route. So a lot of platforms like BigCommerce, which we don't have an actual app for yet, they have the ability to implement via API. And our team actually over here offers free white glove installations for any platform you're on. So Shopify, Magento, Woocommerce, or just, you know, API Again, our team does that at no cost to the boutique owner.

Super cool. I know you're going to get this question or you've probably gotten it a lot, but there's probably people looking for comment. Sold access as well.

Yeah. So we've been actually talking with Brandon over there. They have a lot of cool new features coming out for their service right now. And so I know we are reengaging, I think later in Q1, and we're really excited to work with them. They're awesome. We know that they bring a lot of value to the boutique owners and we want to make sure that, you know, customers, wherever they're buying from, you have the ability to attach route. So hang in tight. It's on the roadmap. We are, you know, actively communicating with them.

Awesome. Talk to me about some of the other. We were kind of talking about this before we started recording the podcast, but some of the other bigger stores that are using Route that you find really interesting.

Yeah, so we've kind of take a little step back. So we actually launched into Shopify January 15th of this year. So it's been a wild ride. We're just around 1700 websites offering route now.

That's crazy growth. That's awesome.

Yeah, it's been, it's been a very wild ride. I. I've started calling my like my months years, I call them route years. And so I've been here, I got here in March, so I've had like eight route years. It's really awesome to see that there is such a need out there. And we knew what we were on to, obviously, which is why we went through the painstaking work of getting insured by Lloyd's of London. Getting all the backing set up. Took about a year before we even launched our product. And so we knew that we would hoped. Right. You hope before you launch a company that, you know, people will, there'll be a good product market fit. And we underestimated how, how bad of a need there was. So yeah. So we have just recently launched with Chubby's shorts, which I think last time. They're, you know, one of the biggest Shopify pluses out there. Really cool branding. Great name, coolest guys by the way. Very, very cool guys over there. Love working with them. We're actually working with Pura Vita, getting some last, you know, T's crossed and I's dotted before we go live on their site. So some, some bigger Shopify we're really excited to start working with.

That's awesome. I love. If anyone doesn't follow Chubby's, I just have to put this in here. If you don't follow Chubby's, it is probably hands down some of the best marketing I've ever seen targeted to men. It is hysterical.

They are, they are on point. They are funny. Yeah, they definitely follow. They're officially a Route partner, so we're. I will give them all the praise I can because they're, they're seriously awesome.

That is awesome. Outside of apparel, what other verticals do you guys work in?

Yeah, great question. So we have like three main, like areas of focus here at Route. We've identified these areas as like where we do solve a real need. One is apparel, right. And then two we have health, beauty, fitness. So makeup websites where actually Millie Bobby Brown, if you're familiar with Stranger Things 11, she has a skincare line I think, and we're live with them. They're, they're super awesome. So health, beauty, fitness, you know, workout equipment, pills. Right. If you're buying anything online, like multivitamins, whatever, a lot of those websites. And then our third vertical that we, we focus on, which this vertical is really around, they have a lot of damaged issues is Home and Garden. So Zinus mattresses, if you're familiar with them, actually fun fact, I bought one. So they're the number one selling mattress on Amazon and I, I sleep on one and then I ended up later reaching out to them and they loved, Love Route very. So they, they actually kind of have a funny story. They had a required signature requirement on their site and it was like creating a lot of friction for their customers because of course they show up at 11am, right? You're at work, you're never there, you have to sign for it. It's a nightmare. And so we actually use Route. They use Route to supplement that option and so it's actually brought the cost of shipping down for their customers and they can self insure if they'd like. So yeah, Home and Garden is a good one. We're replacing a lot of damaged items in that one, but a great vertical for us. A lot of customers are happy.

That's awesome. All right, I've got a backup because I feel like we've talked a lot about what route is, how it works.

Yes.

Tell me the backstory. Where did it all come from?

Great. Yes. I love this story. So our CEO, founder Evan Walker, has been in E commerce for almost 20, 25 years. Long, long time. And kind of stumbled upon this idea of he was working, he owned an agency. They had 30 or 40 websites they were consulting with and they were kind of brainstorming on how, how do you increase conversion. Right. You, you spend all this money to get customers to your site. How do you convert them better? Right. A key component they identified was just trust. Like, have I ever been on this site before? Right. Why do people buy on Amazon? I think anybody here would agree, like, you go on Amazon because you know what you're gonna get, right? Like, you know, if anything's gonna happen, you're gonna get taken care of. Like, Amazon has the customer's back. And so building that trust in your own brand and your own environment on your dot com, you know, was where they were focused. And so, you know, it was kind of two components. They wanted to figure out, well, how can we make sure that there's visibility with the package being tracked, actually. And then the issue was, well, what if the package never shows up? So from that kind of crux, they came up with Route, essentially, which is, we're a two product company. The foremost product is shipping insurance, which you are all aware of. But the bigger umbrella, the bigger product is we actually have where an app that you can download in the Apple App Store and you can visually track anything you buy online. So if you're buying from Amazon, ebay, from your favorite boutique anywhere you buy online, that all gets pulled into visual, like a visual map inside the app. And then you can ensure on at the website level and inside the app, you're actually able to file a claim. So this app just launched actually last week, which is really exciting for us. We did a big Press release with TechCrunch and GQ and Bloomberg and a lot of these bigger outlets. So it's fully live. Anybody can go to the App Store right now and download Route and then you connect your Gmail and what's quote unquote been called the Route bot, will essentially look through your emails and say, oh, is there an order confirmation number? Yes.

Cool.

Pull that information into the app so, you know Gone are the days that you have to go dig through your email, find the 16 digit tracking number, figure out who the shipper is, right. Like that whole nightmare. And then if you have multiple packages, right. And we consolidated on it on a map and so we kind of did things in reverse.

I'm blown away by this. I'm thinking a number one, I don't ever want my husband to know because I mean, I hide those emails for a reason. But number two, you know how many times I've sat back and wondered, especially this time of year when you're buying so much stuff online and you sit back and you wonder like, did all the things I ordered even show up? Like, did I keep track well enough? Is there, you know, with something shipping in multiple packages? I don't know. That's really, really cool.

Thank you. Yeah, we're super excited about it. We actually have been a crazy reception. A lot of people signed up for the wait list, like a lot of people I know. Currently we're at about 10,000 users in the app and we've only opened it to about 5% of the people on the wait list. And so you're not alone. A lot of people are excited about it. It's kind of funny. We kind of did things in reverse. We were kind of like, while we're figuring out the app, let's get, you know, the shipping insurance piece of it rolling, which is Route, as you probably all are aware of it today. But it's actually really funny. That's not even, that's only going to end up being like, you know, 10 or 20% of what route actually is. It's really the app experience. It's Route's goal is like today you hit submit, right? You buy something on a store and then it goes into this black void, right? And then randomly might show up on your porch like five to ten days later. And we're like, that's not a good enough experience. Like that's unacceptable. And so Routes bringing the visibility, bringing the peace of mind through the insurance piece. And we're really, we're trying, our goal is to help elevate brands experience. So inside the app you can go to what's called your universal order history, right? You can see everything you buy online, which again might be scary for you, don't show your husband. But there's, there's merchant pages in there actually, right. And so the merchant pages are really cool. You can go in there. It redirects customers back to your website and there's actually a place that you can put your own branding, talk about your company and kind of just like Facebook. Right. Like it's, it's a. You can go claim your, your handle is what we call them, your page. Control the content and make sure that anytime a customer you know is on your page, they're having another good experience with your brand. Right. Honestly, I'm kind of sick of Amazon. I pretty much only buy toiletries on Amazon now. Not, not like I don't buy anything like cool. If I want to buy a, you know, a Ruka backpack, you know, I want to do it in their experience on their dot com, not inside an Amazon experience. Correct. So that's really. Route is a tool to like bring your brand back to you.

I love that. I think we all definitely share that same thought. We have that in common. We want to bring consumers really back to boutiques. People want to do business with people, not big companies. That's what AMAZ is. And to me, that's why there's such a huge surge in the boutique market right now. And I appreciate the fact that you are catering to that experience.

Yeah, right. Like, I keep up with the messages that come through the hub and to take a moment, like I am incredibly humbled and impressed by the level of like grit and pure will that the members have to be successful. And it's like you deserve as much business as you can and route's just there to help you. Right. We're going to help you get rid of shipping loss. We're going to make sure your customers have a good experience and that they keep shopping with you. Because unfortunately we have Data that supports 70 to 80% of the time if a customer has a bad shipping experience on your site, they're not coming back, unfortunately. Right. And so we're here as a tool to help boutiques keep customers loyal, have a good smooth experience and make sure that the money is going to where it should, which is small business owners to these boutiques who are, you know, putting their heart and souls into, into these sites.

I appreciate that and I know they appreciate that there is, that is a hard working group of people. And I think what's hard about the boutique industry is it looks easy on the outside. Everyone wants to own a boutique. Right. Or entrepreneurship today seems so easy. But you guys know firsthand what it's like to get into business and the pivots that you go through and the ups and the downs. And it's so important for everyone to have a community of people they trust that they can rely on to get to the next level. So, again, thank you for that.

Yeah, absolutely.

One question. I know I forgot to ask you this earlier and I know there's going to be some listeners that are interested in this. We talk a lot about Route for retail and for the consumer experience. But as you've seen in our community, Route could work on the wholesale side of things as well, maybe just in a little bit different fashion. For example, I know a great member of our community just last week had a huge order go missing. Same thing went into the black hole. I think it was like an $800 wholesale order. She's out. The boutique owner's out. The boutique owner, you know, was already planning on selling those items for, I think, Black Friday. So it was kind of a nightmare. Could Route have helped the situation like that?

Absolutely. That is super tragic and super unfortunate because again, at that point, it's kind of a lose, lose. Right? The wholesaler, to keep that customer happy and continuing to shop with them, is going to have to send a new package and eat the cost. So Route can definitely help. We have a 5, 5 to 10,000 kind of depending on volume. But we, I'll call it a $5,000 order value limit. So any orders under $5,000 we can insure. And basically kind of, you know, how we work with wholesalers is we look at how many monthly orders are you doing and then what's your aov, your average order value? And if the numbers kind of go upside down, Right. We'll work with some wholesalers like, oh, I'm doing 100 orders, but there are thousand other orders, which is a great business. Right. But for Route, that's a tough store to ensure because. Right. One package goes missing or gets damaged, we go upside down in the account. So we definitely try to keep everybody like with Route. And so what, you know, some tools we've come out with is we can actually raise the premium to 2 or 3% of cart value. So instead of, you know, $5 to ensure a $500 order, it would have been $10. Right. So that helps route. Sorry, at 2%. So that helps Route work with wholesalers. We would love to work with every wholesaler and we can so. And kind of funny. Something funny. On that note, a website I had mentioned earlier zines the mattress company. So we rolled their site out at 1% and they kind of had a lower attachment rate. And so we actually, we suggested trying going to 2%. Right. Doubling the price of Route. And they Almost, they almost 3x their attachment rate. When customers were seeing an Option for twice the price. Right. And we started, obviously there's the whole concept of like price elasticity and perceived value. And what we figured out is kind of on these lower ticket items or, sorry, higher ticket Items, like, right, a $500 order. Five, $5 in a consumer's head, it kind of doesn't match up. Right. It seems like too little for how much value you're bringing. But Moving it to 10% is a lot more. Sorry, to 2%. Moving it to $10. Right. 5 to 10. It makes more sense. And so 2%. I mean as a merchant you might be afraid like, oh, I don't want to go 2%. But actually it might be a more beneficial, you know, strategy for you with Route.

That's really interesting. I think a lot of wholesalers listening would agree, like, that's still worth it. And retailers listening would agree that's still worth it because at the risk of losing an $800 or a thousand dollar order, I mean that's a huge risk. So definitely, definitely helpful. Is there anything else that you would love to share about the story of Route or anything else you feel like boutique owners should know when it comes to using it successfully?

Yeah, I think like one last thing I'd probably end on is the Hub is awesome and we've loved actually kind of fun fact, shout out to Lindsay Henneman. I think it's Letty Boutique. She. Yeah, kind of fun fact how we guys, how we figured out about the Hub was I was working here in May and there was only like 20 of us then. And one random weekend we had like 30 boutique hub, like boutiques download Route, which was back then was a lot for like a two day time window. And we're like, what the heck just happened? And, and we did a little digging. We found out she'd actually just posted about Route in the Hub and we had no clue. We. Right. We had no idea, you know, what the Hub was. It was a Facebook group. And so that's actually kind of how we found out about the Hub. And then we worked, you know, with you guys to get a part like to like work, you know, to connect and work with the Hub members after that. But it was really funny. That was like our first interaction with the Hub. But we're not like a super household name as of yet. Like we just had an article put out on TechCrunch and Hypebeast, which is a streetwear magazine. And so we're getting a lot more awesome recognition. But I think in, in 12 months, I think Route's going to be a lot more of a household name. Most people will have the app because it's free, right? Why not? And then, you know, shipping insurance, you know, customer facing shipping insurance will be a little bit more common. And so, you know, as we're chubby is their goal is to be on the fringe, to be like, offering things to their customers that they can't get anywhere else. That's how they've stayed competitive. That's how they've secured their place in their market. And so Route might be kind of an interesting concept or you might not think it will fit well with your customers. But what we see is when Route is on a site, we see up to 60% of the time customers will purchase Route. And so all the data we're collecting is actually like saying customers want this. And I actually sent a post in the Hub, I think it was yesterday, of some cool customer reviews. And if you haven't seen it, you should go read through them. They're really cool talking about how. So our customer service team has a 98% CSAT score, which if you're familiar with those, is really hard to get. So we're really prideful about that. Like, sorry, very like, prideful is a weird word, but like happy about that because, like, Best in class is around 85. You know, we're doing everything we can to help boutique members be successful. And Route's a cool tool. If you want to test it with your customers, check us out. It's free. There's no cost. One kind of common misconception is Route can go onto your site in one of two ways, as opt in, meaning the customer has to select the box, or opt out, meaning the customer has to deselect the box. And I get a lot of questions around those two. And so before I go, I definitely want to kind of hit on that. So opt in, we see about 20% of the time customers will purchase Route, which is awesome. You're offering Route. They can have free visual tracking. It's a great experience. About 60% of customers on opt out will purchase Route. And we see. So of our 1700 partnered sites, about 1500 are on opt out. So the majority, almost 90%, are on opt out because their goal with Route is to get as much store coverage as possible. They're trying to mitigate shipping loss. They're trying to take away the errors that all these carriers are inflicting upon them. Right. The $700 package going missing last week, like, that's what Route is trying to help These, these merchants get rid of those situations. And so if you have route or you're interested in route, that's kind of the two main methods. And I just want to make sure that it's like whatever your business goals with route is, I would figure out what is it and then. And then choose between those two. That's probably my most common question.

That's awesome. Super helpful. Well, Kyle, thank you so much. It's awesome to work with you guys. I love the fact that we get to share these things with members. And yes, shout out. Lindsay, thank you so much for the recommendation. If you're listening and you also know really cool tools that we don't yet provide members of the Boutique Hub or we don't talk about inside of the Boutique Hub because we do it is like a vetted selection process. As you know, you work with Sarah on our team and she takes that seriously that she's not going to let anybody into the hub unless they are totally vetted. Send them our way. Send some recommendations our way. So, Kyle, thanks again. Kudos to your team. We can't wait to share this and continue to watch your success and your growth at Route.

I appreciate it. Thank you so much.

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Sam.