A free shipping offer is a powerful ecommerce promotion. It can boost conversion rates and increase average order values.
Like other forms of advertising and promotion, free shipping is an expense. A merchant can see the charges from UPS, FedEx, and the United States Postal Service. But, like other forms of advertising and promotion, free shipping is important.
Research reports, surveys, and questionnaires have shown that shoppers love free shipping. Customers are more likely to buy when a free or discounted shipping offer is available, and more likely to abandon a shopping cart when it is not.
For many ecommerce businesses, the question this holiday season is not “should we offer free shipping?” but “how will we offer free shipping?”
What follows are seven tried-and-true shipping promotions to consider this holiday season.
1. Free Shipping for Every Order
An online store can make a lot of friends with free shipping on every order. This approach is easy for consumers to understand and simple for a business to execute.
There are no questions, no second-guessing, and no hesitation. Every order is free. All of the shipping cost obstacles have been cleared.
When a business offers free shipping on every order, conversions are the goal. The business wants to sell more and is willing to invest.
If your company is going to choose this mother of all free shipping offers, understand how many additional sales will be needed to boost profit.
2. Free, Slow Shipping
Shoppers like free shipping, whether they use it or not. It somehow indicates to shoppers that your business cares about them and does the right thing.
A free shipping offer, however, doesn’t necessarily stop a customer from paying for some form of premium shipping. Amazon, which is a leader in offering free shipping, uses a sense of urgency to get shoppers to pay for a premium service.
For example, an Amazon Prime member will frequently have a free, two-day shipping offer and the option to pay a fee to get next-day shipping.
Try this for your business. Show shoppers the expected delivery dates for slow free shipping and give them the option to pay for faster services.
The availability of a free shipping offer will still help with conversation rates, while offering premium services may help recuperate some shipping costs.
3. Free, Fast Shipping
Next, you could take everything discussed in the last point and turn it on its head. Similar to offering free shipping on every order, offering one-or-two day free shipping aims to give your business a conversation rate shot in the arm.
This particular sort of free shipping offer may work best for ecommerce operations shipping from distributed warehouses. This is the approach Amazon takes with Prime. The company has fulfillment and sortation centers all around the major population centers in the United States. Amazon can offer free and fast shipping because in many cases it can reach a customer in two days with ground shipping.
4. Free Shipping Threshold
According to a 2017 report, about 48 percent of American consumers are willing to add an extra item to an ecommerce order to qualify for free shipping.
This behavior is wired into shoppers. Presented with a free shipping threshold of $50, a shopping cart total of $44, and a shipping quote of $5, many shoppers would pay $6 for, say, a gourmet, curry-flavored lollipop, rather than paying for the shipping.
Try setting your free shipping threshold about 40 percent above your business’s current average order value.
5. Second Item Earns Free Shipping
Another way to increase average order value and unit sales is to offer free shipping when a customer buys two or more items.
Imagine a consumer shopping for her schnauzer. She can buy a 36-count box of Greenies Regular Dental Dog Treats for $24.99 and pay $7.49 in shipping, or she can earn free shipping when she buys two boxes.
She doubles up on Greenies because she knows her schnauzer will gnaw them. The retailer earns more. And shipping two boxes doesn’t double the cost. Rather the increase in shipping in incremental.
6. Free Shipping on Next Order
If repeat sales are the goal and your business is not as concerned with an immediate boost to conversion rates, you can offer shoppers free shipping on their next order.
Simply include a free shipping coupon code in the delivery confirmation email message or in a follow-up message. It might be especially nice to send a physical thank you card and include the free shipping coupon code.
7. Free Shipping for Members
A repeat customer is worth a lot more to your business than a one-and-done holiday shopper.
For this reason, one of the best ways to grow an ecommerce business long term is to convert holiday shoppers into loyal shoppers.
During the Christmas season, consumers are more willing to try new stores as they scour the aisles — physical and virtual — for gifts. So why not offer free shipping when someone becomes a member of your loyalty program or club this holiday season. You could even charge folks to join.
A 2017 UPS report found that about 29 percent of shoppers would be willing to join a loyalty program to qualify for a free shipping offer.