When I’m shopping on the internet, there are a few things I look out for. Does the website I’m buying from look trustworthy? Does it look up to date? How can I pay for the items? And most importantly to myself, how much will shipping be?
The last question is often the most crucial. I can get to the final page of the checkout, be on the verge of purchasing my items and then I see what I’m to be charged for shipping. This gets particularly annoying when I’m spending a fair chunk of money in the first place. I tend to almost perceive free shipping as a must at this point.
This might be an irrational thought as we should pay for what we want to receive, but we’ve become so spoilt by the idea of free shipping, that you feel disappointed when you don’t receive it. Research conducted for Consumerreports.org in 2012 established that 23% of people visiting websites will only purchase goods when they know shipping is free. That’s now two years ago and more shops than ever offer free shipping to their customers.
Making free shipping viable
To make free shipping viable seems like the toughest thing to do. One option would be to offer very cheap, untracked, shipping, but this can have adverse effects on your business if the customer decides that he wants to say that the item never arrived, so you can’t track it or prove that it did.
You could also offer free shipping to repeat customers. It could be similar to a loyalty scheme whereby they get access to free shipping after they have ordered from you multiple times. But of course that would have to be advertised, as otherwise you are lacking the incentive for people to do it. Or you could hand out occasional free shipping vouchers to customers that you know purchase high volumes from you.
From my own personal experience I can confirm that events such as free shipping weekends work exceptionally well. Just this weekend there was an offer of free shipping on one of my partners favourite sites and it prompted her to buy plenty of items that she wouldn’t have otherwise purchased that weekend. The site had done an extensive email marketing campaign for a month before this one weekend and it worked. She was looking forward to this weekend and had already made a list of things she wanted, just to save a fiver on shipping. You can do the same for your free weekends by using ekmResponse, which will let you set up a campaign with ease. This doesn’t permanently increase your sales however and is just an occasional offer. However if you let these sort of events run at several points in the year, like for example during certain holidays, then you will have a fairly regular increase in sales.
The best option is to offer free shipping over a certain cart value. Stats from a UPS survey suggest that 58% of shoppers asked, had added further items to the shopping cart to be able to qualify for the free shipping options. If you set a target that needs to be reached, most customers will go and try and reach that target if they feel that they are close enough. This is the best way to make sure that you don’t take too much of a hit by offering the shipping for free. You can obviously adjust the target that your customers need to reach depending on the value of your items and depending on how much of an adjustment you are able to sustain long term.
Be aware however of regional limitations; if you have a lot of customers that order internationally, it might not be a good idea to offer free shipping to them as the costs would just be unreasonable for your profit margins. However, there might be a way of making that work if the goals they have to reach to qualify for the free shipping are set higher than that for national customers. International customers might well spend significantly more, knowing that they can save the significant shipping costs.
Free shipping is the way to go
It is obvious that there are benefits to offering free shipping on your eCommerce site. It might seem pricey to start with, but the increase in sales and depending on your strategy, the potential increase in sales values, should, long term, be outweighing any doubts you might have concerning the change in strategy. So don’t trip up on not offering this nifty little trick, give it a try and see how it changes things for you! It will certainly help prevent a large chunk of cart abandonment.
Author: Sönke Dökel is an Online Marketing Expert at ekmPowershop.com, the UK’s leading hosted eCommerce website solution.