Utilizing free shipping to win customers
Put yourself in your customers' shoes for a second. You've scoured the web trying to find the best price on a product, picking all the right coupons and waiting until a sale hits. You select the item from an eCommerce website and hit the checkout button, fill in your payment and shipping information and then get to the confirmation page. All of a sudden, you're blindsided by an astronomical shipping fee. You instantly leave your order unfulfilled, frustrated you spent so much time shopping only to be let down.
Shipping is a difficult topic for many retailers, and is one of much discussion. At the recent Operations Summit conference, several retail experts advocated the value of free shipping and how it can help you stand out among competitors, lower shopping cart abandonment rates and improve the customer experience.
While free shipping isn't necessarily the best strategy for every company, it can be used to great effect.
Reporting on the conference, Multichannel Merchant notes that 75 percent of consumers prefer shopping with merchants who provide free shipping, and as many as 36 percent won't buy from a retailer at all if they don't offer some way to knock off shipping fees. The key is learning when to offer free shipping so you don't get burned.
Several different models were brought up at the conference. A premium brand, such as L.L. Bean can get away with free shipping for all purchases. However, few companies have that luxury. In those instances, free shipping with a paid membership, after hitting certain minimums, on select items, web-to-physical store offerings and other options are available.
"But one of the best ways if you are just starting out in the free shipping realm … is to start by tying the option to a coupon code," the retail blog advocates. "By doing so, you can send out a coupon to a segmented part of your audience and not your entire fan base. This way you can see what customers are using it and how much it is costing you."
Offering free shipping relies on merchants knowing how much it costs them to process orders and get them to customers, on top of understanding other logistical factors. ECommerce software such as SalesWarp can help crunch the numbers and figure out the best shipping offer.