One of the biggest factors when converting shoppers online is the cost of shipping. If your brand is presenting unexpected shipping costs in your sales funnel, you’re going to hurt conversions as your prospects will abandon their shopping cart.
The Psychological Power of Free Shipping
There’s no doubt that free shipping helps to drive sales for your online store. It increases conversion rate and average order value. I was reading up an comScore study and found that –
- 77% of shoppers said that free shipping was the most important part in their decision to abandon the cart. That’s a very significant percentage!
Another interesting find in the study was that –
- 68% of shoppers would refer others to the store, provided that it had a free shipping offer. 60% of shoppers actually added more items to their cart, just to avail of the free shipping. This just goes to show how free shipping can in fact, increase your stores AOV.
Let’s talk about some of the benefits that Free Shipping can offer your web store.
Increase in Orders & AOV
In the short term, free shipping can lead to more orders. It can also lead to increased average order size, particularly when a minimum value threshold is required to qualify for the offer.
Increase in New Customers & Lifetime Value
Another benefit that free shipping has to offer your brand is that many online shoppers will continue to buy from brands that offer free shipping. They also tend to spread awareness on your offers that include free shipping, thus referring new and existing customers to purchase from you.
The end result is that you acquire new customers and your lifetime value increases with existing customers.
It Keeps You Competitive & Reduces Cart Abandonment
We spoke about the problem of not having a free shipping offer and its why 77% of shoppers abandon their cart. Free shipping solves that cart abandonment problem and it keeps you competitive, helping you to increase conversions.
Right…
So we know it’s important to include a free shipping offer. Is it an option for every web store owner? Absorbing all shipping and handling costs has drawbacks, the most obvious one being the loss of profit margins.
Let’s take a look at some approaches you can offer on your store that can deliver the benefits that are mentioned above.
7 Ways To Offer Free Shipping For Your eCom Brand
Free Shipping With a Minimum Threshold
This is perhaps the most common form of a free shipping offer. When your prospect reaches a minimum monetary value in their shopping cart, it can then trigger free shipping. For example, if your AOV is 40 euro, offer free shipping on 50 euro offers.
Free Shipping on Certain Times of the Year
Another way to offer free shipping is to do it periodically rather than all year round. Holidays are typically when competition is at its peak and shoppers’ expectations are high. A periodic free shipping offer will bring new customers, bring back loyal customers and essentially drive sales.
Offer Free Shipping To Members of a “Club” or Program
This is just like how Amazon does it with their Prime membership program. They offer free shipping and other perks to members of their Prime program. Offering free shipping to members only is increasingly popular. Members pay an annual fee in return for exclusivity and perks like free shipping, faster delivery times, pre-sale offers, etc
Free Shipping To Certain Locations
You can also try the idea of offering free shipping to certain locations. You can test the idea of doing this within a country or continent. Costs are kept to a minimum with domestic shipping fees, avoiding hefty international rates. It’s a good way to entice new markets to spend on your store if you see a certain Geo location lagging behind in terms of sales.
Free Shipping On Returns
This offer is most commonly used with apparel and footwear retailers, as it reassures the shopper that if the item doesn’t fit, they can easily return it. Stores with high return rates should consider this type of free shipping offer as it’s common and expected. Free shipping on returns plays a significant role in the customer’s purchasing decision. I read that up to 70% of customers consider free returns as an important factor in their purchasing decision.
Offer Free Shipping On Certain Items
This is a clever way of promoting higher margin goods in your store. Offering free shipping on higher margin items will more easily absorb the shipping cost. Free shipping on certain items could also be a way of getting rid of stock that’s a challenge to sell.
Free Shipping To Those In Your Loyalty Program
Have you got a loyalty program? You might want to consider one. They are great for engaging your customers and rewarding them with further value when they make purchases with you.
They help to increase lifetime value and build your brand’s value. You can offer free shipping as an incentive to encourage repeat purchasing.
To Conclude
I hope this post has given you some ideas on how you can offer different free shipping offers as part of your brand’s value to your customers.
You know your store, your products, your margins and your demographics, more than anyone else. Understanding the behaviour and habits of your prospects and customers will always be the biggest challenge. Test out a few of the free shipping offers above and monitor the effects that they offer to your brand over a good sample amount of time.
