Remember how coupons were nice, and now everyone wants to use one before purchasing? The desire for free shipping is headed that way as well. According to the Walker Sands Future of Retail 2017 study, 80% of respondents said that free shipping would make them more likely to buy online.
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Many studies also show that the top reason for shopping cart abandonment is shipping costs. The key is to find a way to get those customers to stay and buy, without losing all your profits on free shipping.
Maximize Shipping Discounts
Before I offer some ideas, I recommend that you start creating a list of shipping discounts you can offer. Some eCommerce shipping softwares, such as ShipStation, can provide large discounts on UPS postage, FedEx, DHL Express and more. In addition, your eCommerce shipping software can give you the ability to compare shipping rates across carriers, and choose the best carrier for your orders based on rate, delivery time frame, package dimensions, geography and more.
Conditional Free Shipping
First you need to create the lowest rates on your shipping fees. A great way to handle the “free shipping” challenge while still making a profit is to make the terms conditional. Here are some helpful tips you should follow:
This helps online sellers in two ways. First, setting a minimum threshold allows you to avoid losing money on smaller orders. In addition, it is a great way to increase your order size. According to the 2017 UPS Pulse of the Online Shopper report, 48% of shoppers added to their shopping carts just to qualify for free shipping.
What’s the right amount for your minimum order threshold?
You’ll need to experiment to find the amount that drives more, and higher, sales. Ideally, the amount should be low enough to be perceived as a promotion that attracts new customers, but high enough so you aren’t losing money.
2. Provide limited-time free shipping promotions
When your sales are down, a limited-time free shipping offer can turn that slump around. The goal is to motivate prospective buyers and turn prospects into paying customers. One idea is to offer a free shipping coupon for the first purchase a customer makes at your store. Another idea is to offer free shipping during the holidays or another limited time-frame (such as Black Friday or Cyber Monday) that can increase sales. Since these are limited-time offers you’ll want to boost your marketing efforts, especially through email campaigns or social media campaigns.
How do you determine which products to provide with free shipping? First, consider using free shipping on products that you want to move. If old inventory products aren’t selling as well as expected, a free shipping offer will help move it out. Another idea is to offer free shipping on expensive items which are small and light, such as jewelry.
There is a great Kissmetrics article that teaches eCommerce business owners a couple of easy tests they can use to determine the best-converting free shipping offers in their businesses.
Using proven conditional free shipping techniques, and testing their effectiveness in your business, may be just what you need to move the sales needle way ahead. Get started on this today, and your sales might be growing as soon as tomorrow!
About the author:
Robert Gilbreath, Vice President of Marketing and Partnerships at ShipStation. Robert was recently named to Salehoo’s list of Top 50 Online Seller Influencers. ShipStation is the leading web-based shipping solution that helps eCommerce retailers import, organize, process, package, and ship their orders quickly and easily from any web browser.
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