With holiday shopping and holiday shipping quickly on their way you may be looking at your online shop with a critical eye, wondering how you can make the most of the holiday season.
And if you aren’t yet then it’s time to get moving!
One way to entice buyers to spend in your shop is to offer free shipping. Whether you offer it short term, for the holiday season or all of the time, here are some reasons you might consider free shipping.
- 61% online shoppers prefer to shop with a retailer that offers free shipping than one that doesn’t. — Forrester Research (2007)
- 60% claim free shipping is a reason they are more likely to shop online. — Harris Interactive (2008)
- 90% believe free shipping offers would entice them to spend more online. — The Conference Board (2008)
- 43% of shoppers abandon their shopping carts because of unexpectedly high shipping charges. — PayPal, comScore (2008)
Why does free shipping appeal to potential buyers? Part of the answer lies in “perceived value.”
Let’s say a shopper is looking at two pairs of earrings to purchase as a potential gift. The pairs of earrings are equally liked and seem to be of equal value as far as the quality of the workmanship and the products used in their making.
Earrings A come with free shipping and Earrings B don’t. It stands to reason that the shop that offers free shipping will get the sale.
On the other hand, if Earrings B are discounted as part of a shop sale the earrings lose perceived value. The shopper gets the idea that they’ve sat around for a while, have a flaw or are otherwise unsuitable. So discounting items rather than offering free shipping may not boost your sales as much as you might have hoped they would.
The shopper chooses the free shipping because he/she perceives that it adds value to the purchase by saving him/her money. (Studies have shown that even if the amount of the discount is more than the cost of shipping shoppers will choose free shipping!)
After all, most brick and mortar merchants are offering discounts this time of year so the discount doesn’t seem like anything special. BUT if the customer doesn’t have to slog out to the shops, find parking, fight the crowds AND they get free shipping. You are likely to win over the other online shop as well as the brick and mortar shops. BONUS!
One instance where either a discount OR free shipping may help is in a category with lots of competition. Let’s use those earrings as an example again. If a potential customer is looking at 10 or 15 pairs of earrings the discounts offered will grab her/his attention over the shops that are offering neither a discount or free shipping. But then if one of those shops offers free shipping then the free shipping will win the sale most of the time.
You might also offer free shipping over a set limit, like free shipping for orders over $30. This might help two ways. You might get the sales because you offer free shipping but you may also get more sales. If a customer was planning to buy $20 worth of product from you they are often willing to add another $10 to their order to meet the free shipping thresh hold.
So what’s the answer? Experimentation. Offer a discount for a week or so and then offer free shipping for a week or so and see how each strategy works out for you and your shop.
The key to making a PROFIT here is to make sure to price your items in such a way that offering a discount or free shipping still allows you to make money. After all, that’s why we do what we do in the first place.