Free Shipping is a sales strategy used by eCommerce businesses to encourage online shoppers to purchase without having to worry about the shipping cost.
Does it actually help in improving sales?
Well, “Yes. It does”
One may argue that free shipping is not the ideal solution to ensure growth in sales as it can affect the profit margin. However, if the right tactics are applied, it can surely bring fruitful results.
In this article, I have discussed how to offer free shipping and why it is an important part of your sales strategy. It will also brief you on when you should offer free shipping.
So, let’s start.
Why should you offer Free Shipping?
It is obvious that free shipping delights customers but it also provides ample benefits to eCommerce businesses. Free shipping-
1. Increases Sales
The primary benefit of offering free shipping is that it increases sales.
The tag of “Free Shipping” induces customers to purchase as they would not have to pay additional costs while purchasing a product. A study by Invesp confirms the same, which says that 9 out of 10 consumers find free shipping to be the primary reason to shop online.
2. Increases Average Order Value
Adding to the benefits of free shipping is it boosts your average order value.
Retailers often set a minimum threshold for customers to get free shipping on their purchases. Only if the customer makes a purchase over the threshold, he or she would be eligible for free shipping.
Shoppers add additional items to the cart to cross the threshold value, which eventually results in an increase in the average order value.
The stats collected by Invesp confirm that 93% of the online shoppers show the tendency to purchase more products if the free shipping option is available.
3. Reduces Cart Abandonment
High shipping cost is the foremost reason behind shopping cart abandonment. And it makes sense. When shoppers look for a product, they do not take the shipping charge into account.
And when the price on the payment page goes much higher than what it was on the product page or what they expected, they reluctantly abandon their cart.
Imagine how satisfying it would be for a customer if the product price remains the same throughout.
Related: 12 Ways to Reduce Shopping Cart Abandonment
4. Improves Brand Loyalty
Free shipping helps you earn customer loyalty and improves brand loyalty simultaneously. Customers become loyal to your brand and they keep coming back to your store at regular intervals, avoiding your competitors who are charging a high shipping cost.
How to offer Free Shipping?
Free shipping simply cannot be provided on every product. There are certain ways to offer it. For example-
1. Over a Certain Product Value
You can specify the minimum product amount for which the customer needs to shop to get free shipping. This does not include other charges.
To put it simply, the “product amount” should be equivalent to the threshold, not the “total order value.”
Somewhere, it also encourages cross-selling and upselling.
2. Over a Certain Cart Value
You can define a cart value that a customer must match if he or she does not want to pay the shipping charge.
For example, free shipping if the total order value exceeds $100.
3. Limited-Time Free Shipping
Create urgency to purchase by offering limited-time free shipping. The purpose is to convert prospective buyers into potential customers.
Start sending out emails or post it on social media to make your customers aware of this limited-time offer. Do whatever it takes to reach your audience.
4. On Taking a Membership
You can charge an annual subscription fee for a membership program, under which customers can enjoy the free of cost shipping.
One of the popular examples is Amazon Prime that offers free and quick shipping under their membership program.
5. On Shopping for a Certain Quantity or a Package
This can include offers like Buy 2 or buy a combo and get free shipping.
However, you need to make sure that the package that you are offering or the products falling under “Buy 2 or buy a combo” offer can adjust your shipping cost, else it will be a loss if it is applied on low-priced products too.
When should you offer Free Shipping?
1. On Special Occasions
Free shipping can provide a huge boost to your sales during the holiday season, simply because the shopping fever is high at that time. Occasions like Black Friday, Halloween, Christmas, New Year provide a perfect opportunity to grab more sales by offering free shipping.
2. If Your Competitors are Offering It
It’s good to track your competitors’ activities. It provides you with the areas of improvement.
Check whether your competitors are offering free shipping or not. If they are doing it, you should offer it too, to be in the race among brands. If they aren’t, you can use this to your advantage and get a competitive edge over your competitors.
3. Free Shipping on Returns
If your customers are not satisfied with the product and on top of that if you are asking them to pay the shipping charge for placing a return, it can annoy customers and might affect customer loyalty.
To improve customer satisfaction and maintain customer loyalty, you can devoid your customers from the shipping charge when they place a return request.
Related:
5 Ways to Manage eCommerce Returns
8 Simple Tips to Reduce Product Returns in eCommerce
PrestaShop Free Shipping Manager by KnowBand
Set shipping rules, adjust the shipping price and do much more with PrestaShop Free Shipping Manager addon.
Key Features:
1. Set the minimum cart value for a customer to receive free shipping.
2. Set the minimum and maximum weight of the products to get the free shipping facility.
3. Allow free shipping to users of a particular zone. (Africa, Asia, Europe, etc)
4. Make free shipping available for visitors, guest and customers.
5. Help customers understand the shipping criteria right when they are on the checkout page.
The Bottom line
Free shipping can be a great marketing tactic to boost your eCommerce sales and reduce cart abandonment. But not everyone can afford to provide it. E-commerce giant Amazon started offering free shipping way back but is quite difficult for small scale businesses.
So, make sure to check whether it would be the right idea for your business or not.
If you are already offering it, do let me know how useful it has been to your business so far. If you are planning to offer it, check out the above mentioned free shipping strategies and set yours accordingly.
Have some more points to add? Let me know by dropping a comment below.
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