With the continued rise of e-commerce on a global scale, the issue of Free Shipping has certainly become at the forefront of our minds. At BIG Corp, many of our brands 1) ship globally and 2) have a high value ticket price and therefore free shipping feels like a “must have” in order to satisfy our consumers. This article, however, explains that 100% free shipping, 100% of the time may not be necessary if communicated in a strategic and clear manner. It goes on to explain some simple alternatives that we found extremely usual to trial on some of our brand websites. Check out the article here.
HIGHLIGHTS:
- We must acknowledge that Free Shipping is a powerful incentive to purchase online: “According to Marketing Land, 9 out of 10 customers were incentivised to shop online when offered free shipping.” As a consequence, over 60% of ecommerce businesses claim that free shipping is one of their most important marketing tools. But is this assumption necessarily accurate?
- Lisa Suttora, an eCommerce consultant, brings up a good point that in the past, free shipping was designed to be used as a promotion, NOT a standard pricing model. It is worth to consider that offering alternative incentives that do not impact profit margin so greatly could be a more sustainable model: such as a CRM program to drive loyalty and repeat purchases.
- An effective way to dial back the ‘always on’ free shipping mechanic is using a tiered, calculated rates approach. For example, having a free option (and openly communicating it might take a little longer than ideal!), but then offering for charge options (i.e. Express) based on the height X width X weights of the item.
- Or, offering free shipping with a minimum order to offset the profit hit for covering the fulfilment. The article recommends setting this minimum at 10-15% higher than your average purchase value.
Image Credit: www.easyship.com