In many cases, the cost of shipping comes as a surprise to many people during the checkout process. The 2013 UPS Pulse study found that 54% of the online shoppers surveyed that had abandoned a shopping cart had done so because of the cost of shipping.
A similar study from E-tailing Group in 2011 found that 73% of respondents considered free shipping without conditions “critical”.
Social media reviews are also playing an important role in setting customer expectations. A ComScore survey revealed that the top reason for recommending particular retailers was the availability of free or discounted shipping.
Benefits of Free Shipping to your bottom line
Offering free shipping can help increase sales by attracting more shoppers to your store and reducing shopping cart abandonment rates.
It can also lead to larger orders, particularly when minimum order values apply. The
E-tailing Group study found that more than three-quarters of the respondents had added more to their shopping cart to qualify for free shipping if a minimum order value applied.
Different delivery fee models
As a small retailer you might feel you can’t afford to offer free delivery across your entire range. But it doesn’t have to apply to everything on your site.
There are a few different models already in use, such as only offering free shipping:
- to specific locations
- for orders over a certain value
- for specific products, like smaller or lighter items
- at key shopping times of year like Christmas and Mother’s Day
- for members of the store’s loyalty club
Another popular option is flat rate shipping, offering one delivery fee for everything no matter the size or location of the delivery.
Do your research
Obviously, the choice to deliver goods free of charge can have a big impact on your profit margins. Every business is different, so do your research and weigh up the costs and advantages as they apply to you.
- Put yourself in your customers’ shoes and go online shopping for your products. What are your direct competitors offering in the way of delivery options and costs?
- Do the maths to understand the likely effect on your profit margins. If you want to offer free shipping, the level at which it is set is key.
- Test it out. Offer free delivery for a short period of time to see if it creates more income by generating more sales or lowering shopping cart abandonment.
Get the word out!
If you do decide to discount or do away with delivery costs for your customers, broadcast this loudly and proudly!
Put a notice on your homepage, your product pages and update your shipping information. Then head to your social media channels and let everyone know about the change.