5 Ways Your E-commerce Can Benefit from Free Shipping
Out of all delivery options, free shipping is the most attractive for shoppers, as it’s alluring to those who enjoy simple price structures with no additional fees. Free shipping can be easily turned into a competitive advantage to the business, and it mitigates the cart abandonment rate and boosts sales if executed correctly.
The main question here is how to do it correctly so that your business prospers from it. The challenge is that logistics depends on too many factors, rates, dimensions, volume, destination, carriers, etc. If your business sells low-cost items like clothes, there is little point for you to offer free shipping on items that normally cost less than the actual shipping.
So how can your e-commerce benefit from free shipping? There are 5 main tactics.
Tactic 1: Set Thresholds and Limits
Businesses can set up a minimum purchase threshold to lure shoppers to qualify for free shipping. Let’s say any order over $30 could be delivered for free. That is an attractive option, right? The trick here is that setting the price too low will hurt your margin, too high, and it will discourage your customers. Before committing to any precise numbers, try setting a promotion. The success of promotion should be visible in the increased conversion rate.
The benefit of this shipping tactic is that it increases the number of items shoppers add to their baskets. Thus, increases sales and revenue as well.
Tactic 2: Setting threshold: Delivery dates times
It might be surprising but many customers are willing to wait for their delivery a bit longer. The expedited delivery should be included as one of the shipping options but should be used only if necessary as for Christmas, for instance. Unless it is a special occasion, shoppers are willing to wait a few days to receive their delivery as long as they do not overpay. According to Pitney Bowes, 88% of shoppers said that free shipping with 5-7 day delivery time is more attractive than paying a fee for 1-2 day faster delivery.
Tactic 3: Setting restrictions
This is a very easy way to make free shipping work for you. The key is to offer free shipping only on items where the shipping cost is low. At the same time do not allow free shipping on the items which cost less than the actual shipping cost. Thus, these items do not absorb your profit on shipping. Generally, this tactic works best when you offer a product that has a low shipping cost and makes the majority of your sales.
Tactic 4: Include shipping price within the product size
This tactic might sound a bit sneaky. So is displaying extra shipping costs right at the end of the shopping process! Shoppers hate this out of blue shipping surcharge and in the majority of cases ditch the whole shopping basket. According to eMarketer, more than 86% of cart abandonment is related to high shipping costs. That is a lot of money going out of the window.
Tactic 5: Loyalty programs
Loyalty programs are one of the oldest marketing tricks. This tactic is used to maintain the number of returning customers by offering them a membership card or loyalty program.
This is a great way to make your customers feel like a part of the community where they belong. In terms of free shipping, loyalty programs work similarly to setting thresholds, only that one needs to earn the privilege. This can be done by either paying a yearly subscription or bringing a friend on board or writing reviews, recommendations.
There are many shipping tactics to help you benefit from free shipping; however, for these to work, there needs to be a clear message communicated to your customers. Communicate free delivery at the most appealing spot on your landing page to convert visitors into customers.
Also be sure to indicate to customers at the checkout stage how much they saved on their order. This will also make them buy in the future.
Nikolay Pasholok is product owner and founder of Calcurates by Amasty, a multi-carrier shipping IT solution that helps e-commerce calculate and display the right shipping methods and rates at the checkout.