Should Your Ecommerce Website Offer Free Shipping?
It’s a fairly frequently debated topic – should your ecommerce website offer free shipping to its customers?
In reality, there’s no simple ‘yes’ or ‘no’ answer. However, in the interest of actually answering the question that we pose here, I say that YES, your ecommerce website should offer free shipping to its customers. (A small caveat to include as an after note is that you should; 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, that doesn’t make good business sense… at all, not unless you know that customer will go on to generate significant profits for you over their lifetime as a customer.)
Now onto a little more detail… there’s a level of psychology behind the free shipping offering that triggers the ‘bargain-hunter’ in all of us. Let’s face it, there’s a big part of ecommerce that is about finding the best price for a specific product that you have decided to purchase. And in many cases, we’re not too worried about the shipping cost itself, 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.
But if we look more 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? Now we know there are valid and justified answers to these questions, but rightly or wrongly, that doesn’t change the fact that this is how a large majority of consumers feel. In offering free shipping, buyers feel like you are giving them value, showing them that you value their business. I would be very interested to see any research on the subject that studies this in more depth – for example, all else being 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? I’d like to see.
Research published by Econsultancy in April in the Ecommerce Statistics Compendium demonstrate just how important free shipping is to online shoppers. One particular study looked at website features which make shoppers more of less likely to use an online store. 82% of shoppers were reported to be more likely to use a store that offered free shipping. 82%!! That number is pretty epic. Second to this was a price promise, resulting in 72% of buyers more likely to use the store. Clearly, 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! I’m not saying it’s the answer to all your ecommerce questions, but take a look at how you can use free shipping to increase your ecommerce sales. At what basket value can you afford to offer free shipping? Avon does a great job of getting shoppers to part with more of their hard-earned ££ per purchase by setting a threshold basket value to qualify for free shipping. If you’re a high volume, low product value business, this could be a delightfully simple way of improving your average order values.