You’ll find that the Internet is chock-full of surveys and studies that clearly indicate that offering free shipping can greatly increase conversion rates, profits, and the bottom line. Studies have also found that offering free shipping and no-hassle returns removes buyer’s remorse and builds repeat purchases and customer loyalty.
For example, the results of the North American Technographics Retail Online Benchmark Recontact Survey revealed that 44% of online shoppers abandoned their online purchases in the shopping cart because shipping and handling costs were just too high.
In other articles, such as “Can shipping costs affect online sales?,“ 93% of shoppers said that free shipping would encourage them to buy more products online. That same survey also found that 67% had purchased items in a store rather than online in order to avoid shipping costs, and that 65% of them chose “in store pick-up” for that very same reason.
However, a little more Internet research reveals that free shipping is not always a magic bullet. “How to Offer Free Shipping without Going Broke” found that although 46% of online sellers thought that offering free shipping increased their profits, nearly one third of them said that it did not.
And then there’s that pesky cost of free shipping. Just as there is no free lunch, the expenses for shipping must be absorbed somewhere in the price of doing business Your initial thought may be that profit margins are just too slim to make it work on all your items.
But there are other free shipping options, and if offering it across the board won’t work for your bottom line, consider trying some of these ideas:
- Offer free shipping on smaller, lighter products, because larger, heavier items generally cost much more to ship.
- Offer free shipping after certain purchasing thresholds have been met. The North American Technologies Retail Online Survey mentioned above found that shoppers were willing to increase their spending to meet a free shipping threshold. Experiment with different thresholds to find the one that works best for you and your customers.
- Offer free shipping only during holiday seasons that compliment your products, for example, offer free shipping on truffles for Valentine’s Day, or on pink pajamas for Mother’s Day, or on tree trimmings near Christmas. Customers today expect to receive free shipping around the holidays, which, coincidentally, is also the time when they’re making lots of purchases.
- Offer free shipping to your customers in exchange for an annual fee, or perhaps give them extra incentives for being loyal customers.
Free shipping can be a wonderful thing. Offering it will most likely immediately increase your online sales, and if you set minimum thresholds, it will also lead to larger orders. And because a large percentage of shoppers say they will only purchase items from retailers that offer free shipping, offering it will most likely increase your customer base.
However, don’t believe that offering free shipping is going to solve all of your online woes. An article entitled “The Psychology Behind Free Shipping: Does It Work?” points out that offering free shipping will only work when shoppers are in the right phase of the Buy Cycle. “You can’t make someone purchase just by saying “free shipping“ if they’re not even sure that your product is the right one,” Smith said.
