All eCommerce retailers should be aware of the impact of the word ‘free’ on sales, with 90% of consumers viewing free shipping as a powerful incentive to encourage them to purchase a product. The FuturePay report in 2017 moreover discovered that 86% of shoppers abandoned their shopping cart on discovering the price of shipping, while a further 93% add more items to their cart to qualify for free shipping.
Free shipping is therefore at the forefront of the consumer’s mind. However, you do not have to make a significant loss by introducing such a model - instead, with 93% of users adding additional products to qualify, this means that you can actually INCREASE your profits by introducing free shipping.
Cloud9 Fulfilment is a dedicated provider of international eCommerce services to a multitude of industries, priding itself on comprehensive customer service. As such, the experts have compiled a multitude of tips for any eCommerce business struggling with the question - should I introduce free shipping?
Free shipping is an excellent incentive to draw in new consumers, and may be the difference between an individual purchasing at your store rather than a competitor – particularly more frugal customers. An easy way of offering free shipping to new users is by generating a one-time use coupon for new accounts created on your site.
If an individual has decided to purchase something from your store, shipping costs are often the final hurdle before they commit. Removing this friction is therefore a seamless way to encourage the process.
As a bonus, having users sign up to your newsletter when they make an account is another great way to ensure loyalty to your brand, therefore encouraging further sales. This loyalty can be bolstered by offering additional discounts after further purchases, such as offering a 10% discount or further free shipping for each order completed.
Offering several different methods of shipping to your users can not only increase conversions but also reduce shopping cart abandonment. Consumers are enticed by the option to have their delivery ASAP for a smaller increment of pay, which can be aided by offering a low or non-existent cost for standard delivery.
Offering different carriers to your users can also benefit your business, as you can charge more precise costs, bypass standard delivery processes or even split up orders. These changes may mean your shipping costs are actually reduced, new destinations are introduced and that risk reduction is achieved, as placing your shipments into the hands of a singular carrier can be dangerous.
Different models of shipping you can introduce may include:
Free shipping can make a positive contribution to your business - which is why so many other retailers offer it! However, affordably offering free shipping and balancing the relevant expenses requires factoring in several factors, such as:
These factors should be accompanied by your brand establishing relationships with shipping vendors and carriers. These will enable you to achieve lower rates while offering variation, allowing your business to flourish.
Finally, the short-term cost of introducing free shipping is vital to long-term, lasting relationships with consumers who trust your brand and the product and services you may provide.
Offering free shipping during the down season is a great way to encourage sales, while offering free shipping during the peak season can additionally result in buyers choosing your brand over a competitor.
You can additionally introduce two methods of increasing sales, including offering free shipping when buyers hit a minimum cost or having a ‘buy two, get one free’ model. Consumers would rather pay for another product than have to pay for shipping, as this results in a material benefit.
Introducing these different ways of incentivising free shipping simultaneously generates revenue and encourages customers to return to your store.
Your customers love to feel appreciated. As a result, you can create a customer loyalty program that activates free shipping for users, therefore encouraging them to conduct repeat sales to maintain this status. Alternatively, you can provide this reward to a select group of consumers, such as the top 5% of buyers, incentivising higher spends.
Some stores even offer discounted delivery for a one-off, yearly price, which can lead to increased revenue. If you have already factored shipping costs into your prices, this may lead to a significant annual profit!
Customer feedback is one of the most important ways in which you can not only improve your brand, but also ensure long-lasting and successful customer relationships. By offering your consumers free shipping in return for a review, your visitors are not only likely to leave positive reviews, but moreover provide constructive feedback. By making any necessary alterations to your shipping process, you can nurture your relationships and improve your delivery system.
In addition, online reviews can affect a purchase decision by as much as 93% - so getting as many positive reviews as possible can strengthen your business, with free shipping an excellent way to encourage them. Reviews are also a vital way to influence an undecided customer into choosing your product and can also help reduce returns as customers are more likely to know what they're getting before they buy.
Less returns means lower shipping costs. Another bonus is that having your users cover their own shipping costs for returns can lower costs while discouraging any returns, but this should be clearly stated to prevent negative feedback.
Hearing from your customers allows you to do better. As such, utilising free shipping as a tool to bolster this means rewards for both consumer and retailer.
What does this mean? Free shipping is a low-cost yet high-gain way to improve your eCommerce business - so yes, if your pricing model allows it, free shipping is definitely the way to go.
Cloud9 Fulfilment is an industry-leading and multi-industry provider, working on an international basis to provide fulfilment and distribution services.