Online shoppers are on the hunt for deals. One of the favorite ways consumers like to save on their online purchases is by searching for free shipping offers. Consumers love free shipping, and e‑commerce sites that can provide it are often more successful than those who do not. One of the biggest reasons why people like shopping online is so that they can get a great deal in a convenient way. If a consumer is on an e‑commerce site which charges shipping, they may try to find the item elsewhere or just buy in the store if they can get it for the same price. Compete.com released results from a recent Online Shopper Survey citing that free shipping would encourage 93% of respondents to purchase more online.
Having free shipping is not always a possibility, as giving free shipping directly reduces profit margins. However, retailers who did offer free shipping over the 2009 holiday shopping season were big winners as consumers rushed online to try and save as much money as possible. Executing a free shipping model well is very difficult and takes a significant amount of time and financial investment, especially if you sell electronics which already have a low profit margin.
Some e‑commerce sites use techniques to circumvent free shipping and charge a flat rate on all orders, so that over time they can average the shipping cost to stay profitable. A good example of this is Overstock.com, which charges $2.99 shipping on every order. If you cannot offer free shipping across the board, then you should look to experiment with marketing free shipping promotions, or offer it on select items.
Free shipping is a tactic, not a strategy or your value. Look to drive a certain behavior with a tactical offer, like increasing conversions, boosting average order size, promoting more profitable products, or countering an aggressive competitive campaign. If free shipping becomes more than an offer and evolves into an expectation or the primary value, an online retailer has put itself in a precarious position, according to Bob Angus of The E‑commerce Evangelist Blog.
Customer satisfaction always seems to hurt when shipping cost needs to be paid, regardless of how much value you seem to offer the consumers. Now is a great time to start experimenting with free shipping so you can have a proven plan for your ecommerce storefront in the 2010 holiday season.
"Free Shipping Causes Most Consumers to Purchase More Online," by the ZippyCart Ecommerce Software Content Team, January 21, 2010. Website: www.zippycart.com.
"The Ecommerce Evangelist Blog: Free Shipping Series #1," Angus, Bob. June, 2009.