The Real Cost Of Free Shipping For Retailers

According to a comscore survey, free shipping was such a key motivator, that 93% of online shoppers had taken extra actions, such as purchasing more, or opting for slower shipping, in order to qualify for free shipping.

First up, let’s look at the benefits, to you the retailer, of offering free shipping.

From experience, I can tell you that you’re likely to experience an increase in turnover, and you’ll add more customers to your customer database, but I also wanted to go and get some well researched information for you, so here’s what I found:

When Stitch labs mined data from more than 1 million Shopify stores, they found a potential 10% increase in revenue when companies provide free shipping to customers

Stitch also found that small businesses are three times less likely to offer free shipping than larger counterparts, despite the fact that 65 percent of customers abandon shopping carts and 44 percent do so because of shipping costs.

I also found that when Red Door Interactive conducted similar research, the results showed that when customers were given the free shipping incentive, orders increased by 90% with a 96% confidence level. In addition to this, the company’s Average Order Value (AOV) also rose by 7.32%.

So, it’s sounds like a no brainer, right? Offer free shipping, get more customers and more sales.

But free shipping is never free. Either the customer is paying for it, or the retailer absorbs the cost and hence cuts into their margins.

So before you rush out and offer free shipping, download today’s eguide, and TEST what free shipping means to your business.

You’ll need to spend some time analysing your average freight costs, put a process in place of how you’ll deal with the potential influx of orders, and systemise how your orders are packed and dispatched.

If you’ve found this information useful, come join the Bringing Business To Retail community. We’re a bunch of retailers chatting all things business. Best of all, it’s free.

Get the 8 Strategies To Implement Free Shipping Without Breaking Your Bottom Line

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