Finding leads and converting customers in the digital marketplace takes time, effort, and creativity. And understanding how consumers make decisions and what the latest trends in shopping habits will look like in the future is a full-time job.
Easy shipping and next-day delivery used to be enough to attract new customers to a site, but not anymore. Because of this, it may surprise you to find out what percentage of ecommerce deliveries will have free shipping in 2020.
What percentage of ecommerce companies offer free shipping?
Free shipping is a carrot often dangled by online retailers that comes in many shapes and forms. Often, it’s a conditional service that depends on the customer spending a specific amount.
The psychology is simple: Spend a little more and get free shipping or pay for shipping. In the beginning, it was a way for ecommerce sites to get customers to buy online instead of visiting brick-and-mortar shops.
Over 65% of internet retailers offer free shipping on at least some of their products.
Source: Digital Commerce
If you consider how many customers abandon carts because of excessive shipping costs, free shipping is still a valid marketing strategy. By offering the service, ecommerce companies can entice new sales or increase order values. According to UPS, 43% of consumers research delivery costs when shopping online.
Shipping products obviously isn’t free. This means ecommerce companies need to calculate the right price points and weigh the costs versus the benefits.
Benefits of offering free shipping to customers include:
- Increased sales leading to more revenue.
- Boosts individual order values.
- Helps ecommerce retailers remain competitive.
- Retain customers as part of a loyalty program.
Ecommerce retailers also shouldn’t view free shipping as a wasteful practice. Just like traditional brick-and-mortar shops incorporate expenses in their product’s price, online companies can do the same. This model allows 17.5% of online retailers to offer free shipping on all their products.
Free and fast is best.
While free shipping can help conversion rates, another issue to consider is the speed of the delivery. Ecommerce continues to carve out a larger portion of the retail market every year. When deliveries take more than a week, 38% of shoppers will abandon their carts.
An experiment carried out by the popular online retail platform Etsy showed that transparency remains key. The company hid the shipping costs from customers until checkout and immediately noted a drop in sales. It led to an outcry from buyers and sellers alike. The company also issued a recommendation to sellers to offer free shipping on orders above $35. They now want to make free shipping the norm on the platform instead of the exception.
How to measure the success of ecommerce deliveries that offer free shipping
If you notice customers abandoning carts often, it could be due to excessive shipping costs. It’s also clear that you should keep your customers informed of the related shipping costs during their buying experience. If a customer filled a cart with products, only to see delivery delays and hidden shipping costs during checkout, they’re more likely to cancel the order.
Does it really matter?
Consumers now expect some form of shipping discounts and reasonable delivery times. Online retail will continue to grow in the future, and remaining competitive will require a sustainable ecommerce model. For companies that aren’t getting the sales they expect from their online store, it’s worth revisiting their fulfillment models.
In the future, more retailers will move the majority of their operations online. To improve the customer’s experience, a clear and transparent fulfillment process will be important, and offering free shipping can lead to increased order values and reduced cart abandonment. You can also include free shipping as part of your loyalty programs or use it as a carrot to convert that first-time visitor into a new customer.
Now that you know the benefits of offering free delivery has, you may also want to find out more about the future of ecommerce marketing in this post.