Should Your Ecommerce Website Offer Free Shipping?
There’s no simple ‘yes’ or ‘no’. Yet in the interest of answering the question – YES, your ecommerce website should offer free shipping to its customers. (As long as it is commercially viable. It would be rather silly to offer free shipping for an item for which a customer pays £10, but that costs you £10 to ship… unless you know that customer will go on to generate significant profits for you over their lifetime as a customer).
Now for a little more detail… there’s a level of psychology behind the free shipping offering that triggers the ‘bargain-hunter’ in people. eCommerce is largely centered finding the best price for a product. And in many cases the shipping cost is not a huge worry – it’s the overall cost that makes the difference. Particularly on larger (say £70+) purchases, where the shipping fee is usually a much smaller proportion of the order value.
Looking closely at a typical smaller (sub £70) purchase, the psychology of the shipping fee really comes into play. There’s something about the shipping fee that makes buyers feel like they are wasting their money. After all, what do they get for their £3, £4 or £5? Why should they pay retailers to have the privilege of selling to them? There are valid and justified answers to these questions, but rightly or wrongly, that doesn’t change the feelings of a large majority of consumers. In offering free shipping, buyers feel like they are getting value, and feel their business is valued. If all else was equal, would buyers opt for the online shop that offers a cheaper product price but charges shipping, or would they choose the online shop that gives free shipping but a slightly higher product price? Both ultimately cost the buyer the same, but would the psychology of free shipping come into play here?
Research published by Econsultancy in 2014 demonstrates just how important free shipping is to online shoppers – with one study showing 82% of shoppers were more likely to use a store that offered free shipping. Second to this was a price promise, resulting in 72% of buyers more likely to use the store. Regardless of why a buyer chooses to shop online in the first place (convenience, lifestyle, choice & variety etc.), it appears that the online shopper is still ultimately price sensitive. It does make sense – knowledge is power and the internet and comparison sites give the online buyer a wealth of knowledge within a couple of clicks.
So, what can we take from this discussion? Give free shipping a try! Using free shipping as a marketing tool can drive greater ecommerce sales – tempting shoppers to part with more of their ££ per purchase to reach a basket value which qualifies them for free shipping. High volume, low product-value businesses could successfully improve average order values.