As an e-commerce merchant, you would have seen and read several times how you can reduce cart abandonment, retain more customers, encourage your customers to have repeat purchases, and attract more sales by offering buyers free shipping or a fee cut in their shipping cost.
Now that I’m certain that you have the idea of what I’m talking about, have you ever imagined if you give free shipping offers to customers every now and then, how are you expected to make a profit? Is free shipping as a sales strategy sustainable for your e-commerce business?
This post will help us see how free shipping benefits your store and how it is sustainable when you offer that to customers to encourage them to make a purchase.
Why Is Free Shipping Suitable As A Freebie?
Many instances where online shoppers have halted an order because they feel the shipping fee is too expensive or not worth it for the quantity of the item they want to buy. So customers are known to abandon their purchases because of these reasons.
To bring this category of potential customers into your sales corner, you can double down on the reason for their purchase abandonment and offer them free shipping to encourage them to buy. This way you will be able to attract more sales or increase customer retention rate.
A Baymard report ascertained that 70% of online shoppers halt purchases because of shipping fees. These high numbers can be easily converted to sales if you can bring a suitable solution to the buyers’ problem.
While there are several ways to solve cart abandonment due to shipping fees, the quickest way to get customers like that back is to give free shipping for their orders. You can also explore other options like a shipping fee reduction or a discount on their orders.
Types Of Free Shipping To Increase Sales
One thing to note is that about free shipping is that not all types of free shipping can work for your store. It is not a one size fits all scheme. As a store owner, you need to understand your customers’ behavior and which free shipping type fits into that behavior.
Let’s see the types of free shipping that are fit for use for an online retail business.
1. Minimum order value free shipping
Minimum order value is a measure for determining whether a customer can qualify for free shipping. With this option, customers qualify for free shipping only when their order total exceeds a specified minimum amount. This has a two-way advantage, you get to push customers into spending more or buying more quantity of an item.
2. Factor shipping cost into the price
This type of free shipping offer presents itself to buyers so that they do not have to make another payment for shipping. The price displayed on the product would have the shipping cost calculated with the actual price of the item.
3. Timed free shipping offer
You can place a countdown timer on free shipping offers to nudge customers to take a quick action to buy. Knowing that a timer is attached to the free shipping offer, customers would want to maximize the chance to buy more items and quickly conclude the checkout process.
4. Group Shipping
When you have multiple orders to be fulfilled in the same location. You can give a free shipping discount to the buyers. Or if you know you get quite a number of orders from a certain location, you can attract more customers from that location using free shipping.
Another approach is when the customer’s location is closer to your warehouse or product source. You can give such customers free shipping as well as quick shipping and delivery which gives your extra points for good customer service.
5. Free shipping on specific products
You can selectively offer free shipping on certain products, such as high-margin items or new releases. This approach can create a sense of exclusivity and incentivize customers to purchase those specific products.
With this strategy even if a customer has no intention to buy the item with the free shipping offer, they might be tempted to do so. You can also use this shipping type to increase sales.
6. In-store pickup
When the customer’s location is close to your physical store, you can encourage them to pick up their orders at their own convenience which takes the shipping cost off their spending.
This will gear more customers to see in person, other items and varieties that you have to offer. This as well opens up customers to another world of your brand not just what they get to see on your website.
7. Free shipping on all orders
This is a straightforward approach where you offer free shipping on all orders, regardless of the order value. It simplifies the purchasing process for customers and eliminates any surprises during checkout. Depending on your product niche and how often customers flock to your store, you might need to analyze how sustainable this shipping offer is to your business.