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Shipping Basics
How to Use Free Shipping to Drive Sales
All etailers are consumers first. As a consumer, it’s impossible not to notice the free shipping offered by major online retailers, including Amazon and Zappos. Getting items fast and free (especially free) from online sites is rapidly becoming an expectation for buyers.
If you sell online, chances are you either offer or have considered offering free shipping with purchases. It’s definitely a hot topic in the ecommerce world. But does it help sales? And how can you set up free shipping options to best help your customers, while still staying profitable, and even increasing your sales and profits? We checked out the research, and wanted to share some important findings with you.
How Important is Free Shipping to Online Buyers?
According to the research included in the 2015 UPS Pulse of the Online Shopper, free shipping can be used as a driver of online sales.
While product prices are rated as important more than any other factor in the search/browse experience (81%), shipping costs come in a close second with 75% rating it important. Shoppers will take actions to get free shipping, such as adding items to carts to qualify for free shipping. Interestingly, 45% have abandoned a cart when they don’t qualify for free shipping. Shoppers will pay for shipping when they absolutely must have a product or require fast delivery.
Source: UPS Pulse of the Online Shopper, 2015
Similar research points to the same findings: free shipping offers can be used strategically to drive sales, and there are some instances when free shipping isn’t necessary.
How to Use Free Shipping Offers Strategically
There are many ways to offer free shipping, including those that will increase your average order size, help you get rid of inventory, drive sales during slow times, etc. Here is a list:
- Buy anything, and it gets shipped to you for free.
- Spend a certain amount (such as $35 and up), and you receive free shipping. Setting a threshold that’s too high is a common mistake, however. Experts recommend determining your average order size and making your minimum buy 10 or 15 percent higher to encourage customers to increase their order a little more than they normally would.
- Buy certain items and receive free shipping.
- Buy before a certain time or during a certain time, and you’ll get free shipping. This includes promotions during the fourth quarter holiday season or other holidays.
- Join our email list and receive free shipping. Most top marketers would say building a solid list is the most important tactic in your marketing arsenal. Reward loyal list members with free shipping, news of new products and other offers.
How to Get Customers to Pay for Shipping Without a Backlash
Want to avoid free shipping? Here are some reasons that customers will happily (or at least willingly) pay for free shipping:
- Offer a unique product that customers can’t get anywhere else. If they want it, and have to have it, they’ll need to get it from you. Shipping costs won’t prevent them from buying.
- Provide an incredible value that is still amazing when shipping costs are included. Consumers are getting savvier. If they are getting a major discount on your items, they sometimes understand that a flat shipping rate or realistic shipping cost is fine when considering the overall value.
Free Moving Forward
The bottom line: free shipping offers are here to stay. The key is to experiment by using different types of free shipping offers. This will not only help drive sales, but can ultimately increase your profits.
