Sellers want to maintain their edge beyond the busy holiday shopping season, and free shipping is one way of nudging customers into converting. Evidence supporting the prevalence of this practice arrived when shipping process technology firm Shippo conducted its State of Shipping Survey. The company elaborated on the findings for EcommerceBytes.
A Shippo spokesperson noted more companies offer free shipping than their prior year survey found. Where 40 percent of shippers weren’t making free shipping an option previously, now only 29 percent still hadn’t made free shipping a choice.
So why the increase? A certain big online retailer could be the motivator. “Amazon has changed the way people think about shipping,” a Shippo representative said.
“Consumers now care about shipping at checkout, largely expecting it to be fast and free. So retailers large and small are adopting this strategy and subsidizing shipping costs with either cost baked into the product, or some other call-to-action for their end customers such as reaching a minimum order value to qualify for free shipping.”
Some businesses have been more assertive about adding free shipping according to Shippo. “Consumer products that have recurring or highly repetitive purchase behavior are particularly interesting,” Shippo said.
“So while we’ve seen a slight increase in free shipping across all verticals, subscription businesses are ones that can afford to spend more on acquiring a new customer because once that customer is acquired, the company will continue to earn revenue for a long period of time. These include Shippo customers such as Bean Box, MeUndies, and Ipsy for instance.”
Shippo also called out some data points from their survey, indicating why retailers should consider free shipping for their customers:
– For 81 percent of customers, free shipping is their #1 concern when checking out.
– 93 percent of shoppers take action to qualify for free shipping, and the leading action is adding items to cart.
– 50 percent of consumers will choose a slower transit time to qualify for free shipping, and 83 percent of buyers are willing to wait an additional 2 or more days to get free shipping.
Getting products to customers for free represents just one side of what customers want from their purchases. Shippo also considers a customer-friendly return process important for retailers.
“We’re seeing that a streamlined returns process is a great opportunity for ecommerce brands to gain a competitive advantage over the competition. On average, 40 percent of an online store’s revenue is driven by only 8 percent of their shoppers,” the company said.
“Who are these 8 percent? The returning customers. So one of the best ways to up revenue is to increase the number of your own customers who return to shop again. Providing an easy, smooth shipping and returns experience that surprises and delights customers is a direct path to doing just that.”