DOES FREE SHIPPING INCREASE YOUR ONLINE SALES ?
- Sep 01, 2020
FREE SHIPPING – These are the two magical words that an online shopper’s eyes are always looking for in an E-Store. Savvy marketers and Magento Commerce Developers call it an online marketing tactic and an incentive for customers who complete a pending purchase because when these two words flash in front of their screens, they grow impatient with excitement, knowing that they have to pay less.
But, the question here is – Does FREE SHIPPING add any value to your E-Commerce Website Development efforts and boost your sales? Well, the answer depends on several factors, which we’ll be discussing in this article; from what this offer entails, to how it boosts your online sales, and when to offer it. So let’s dive right in!
Is offering Free Shipping practical?
Free shipping is an Online Marketing in Pakistan strategy applied to exclude customers’ shipping charges for confirmed purchases. That’s its most simplistic definition. However, there are many variations of it; including Free Shipping – with no limitation or qualification needed, after a minimum amount threshold is reached, and for promotions of a limited time. Though considering that there is always room for you to be creative, Magento 2 E-Commerce Development professionals play around with different combinations.
All in all, being a Magento 2 Development Company, what we believe is that online retailers fancy this E-Commerce tweak because of the interests it caught of the savvy buyers, especially the Millennials and Gen-Zers who are always eyeing out for freebies.
Free Shipping – The Psychology Behind
Free Shipping is only efficient when you apply it at the right point of the online shopping cycle. Technically, or say from a Digital Marketing in Pakistan point of view, the shoppers are on one of the following points;
- Awareness – thinking that they have to satisfy an emotion or a need by purchasing.
- Interest – perceiving how the products you offer satisfy their need.
- Knowledge – discovering more about the perks and features of your product.
- Decision – choosing their desired product to fulfill their need after comparing some alternatives.
- Buying – closing the purchase and converting it into return customers.
The BUYING point in the cycle is where you can add value for your potential customers with a Free Shipping offer. Once they are determined to buy from you, remove the risk of them having any second thoughts by including the term FREE. However, if they are still not at the point where they are fully convinced to buy your product, Free Shipping helps in convincing them. Here’s how;
- If the customer is at the awareness point, they are still thinking about what they need. At this point, Free Shipping won’t excite them because they don’t even know whether they want to shop or not.
- If they are at the interest or knowledge points, the evaluation of options is still underway. Hence, they might not buy a product they are unsure of just because of a Free Shipping offer because that is a careless decision.
- If they are at the point of decision, they can decide to purchase the fittest product instantly, regardless of your offering of Free Shipping. Thus, boosting their confidence in their decision.
How to apply Free Shipping for Ground Shipping?
Ground shipping is a cost-friendly way of delivering items to a customer. Generally, freight services like FedEx, TCS, and UPS forward these shipments across the country. And even though this takes longer than the other pathways, customers are always willing to wait, while you can considerably reduce your expenses by playing around with these tweaks on your E-Store;
Set a Minimum Threshold
By setting a minimum order value, you raise your increase your average order value as buyers add more to their carts, just for the sake of Free Shipping. Plus, this way, you also reduce the shipping cost because the number of orders lessens as customers prefer buying in lots.
We know, by now, you must be thinking about what your threshold should be. Being a Digital Marketing Company in Pakistan, we suggest, starting by adding 15-20% to your average order value. Suppose that your current average order value is $70. Adding 15% to 20% to it will make it around $80 to $84.
Next, once you have added your percentage, run the A/B tests again, and analyze the new results. The result? Well, surprisingly, you can even while you are offering Free Shipping. Hence, the tweak is to promote the offer as much as possible, notifying your customers when they are reaching the threshold and then tapping into them with the term – FREE SHIPPING.
Offer a friendly and flat Shipping Fee
One proven online marketing technique to engage shoppers is by offering them to pay a flat and friendly shipment fee. This tweak works wonders because customers shop more, considering they get Free Shipping for more products.
However, on the other hand, those who place low-margin orders pay most or all of the standard shipping costs. All in all, the overall gross margin increases as customers place more orders.
Provide Free Shipping for specific products ONLY
We know that you must be thinking by now that does Free Shipping work wonders for every product. The answer is a big NO. No sane retailer wants to deliver an LED or single makeup products that cost $1 without charging any shipping fee; neither would you. Hence, we suggest;
- Exclude low-margin products from the Free Shipping offer.
- Restrict the offer to high-volume products that have economical shipping costs.
- Remove huge products that require paying high shipment costs.
Inspiration Ahead – Here’s how the brand Kate Spade strategized FREE SHIPPING;
Include Shipment Cost in the Price
There is a psychology behind how savvy buyers view the prices. For instance, consider two figures – $60 plus a $3 shipping fee and $60 with Free Shipping. The conclusion is? Online buyers likely choose the option, which offers Free Shipping rather than the one with added charges.
Hence, add the shipping cost to the price of your products, but under the threshold. And if you sell products that a customer might not find on many Pakistan Selling Sites, this is a WIN-WIN situation for you.
The Do’s and Don’ts of offering FREE SHIPPING
Offering an incentive to your customers comes with its own set of challenges. And it is a risk if you jump right to the conclusion that you will be offering Free Shopping. It isn’t all fun and games when it comes to adjusting costs and offering freebies. There are several do’s and don’ts of it which we’ve covered.
Go Ahead – DO IT
Honestly, it is only safe to try your hands on this incentive if you have calculated your costs and can afford it; without affecting your bottom line negatively. However, this doesn’t end here.
There are many more things you need to focus on before you jump into this do-or-die situation. Out of all, one is to see if your competitors are offering it or not. And if they don’t, go ahead with the plan. Get a competitive edge over them by offering a Free Shipment.
Next, ask your supplier or freight services provider if they offer more affordable shipment options. And lastly, only go ahead with offering the incentive if you have successfully added the shipment cost to the actual prices of your products.
Stop Right Here – DON’T
Online Marketing in Pakistan and Magento Web Developers suggest aborting the mission – OFFER FREE SHIPMENT, if you are only trying to boost your average order value, without deciding a threshold.
Moreover, if you are only using this tweak as a limited-time Online Marketing in Pakistan tool that offers year-round Free Shipping, change the strategy. Instead of what you are currently doing, use it to promote your Loyalty Management System and offer the incentive only to those who are repeat buyers.
And above all, analyze if you can offer Free Shipping or a Free Return. Even though this might not make sense instantly, let us tell you that only a few customers return the order. Thus, it will cost you less, as compared to offering everyone Free Shipping. And if you retail in the fashion industry, this goes out for you because shoppers are more likely to return clothes. After all, they are never sure of what size fits them.
Here’s what we came across on Debenhams’s E-Store while scrolling through. What do you think about these tweaks?
Summarizing It All
Free Shipping is a proven way of boosting your online sales because shoppers admire it. Who doesn’t love saving money while they are on a shopping haul? We all do.
However, this tweak only works for some online retailers in the right settings. So, assuming that you don’t want to be one of those retailers whose Magento E-Commerce Development efforts go down the drain, we suggest, getting in touch with us at Xcentric Services and letting our Digital Services team help you strategize and implement this tweak.
Being a Magento 2 Development Agency, we’ve always helped big brands reach their goals; be it engaging customers or planning a strategy that offers freebies like top Online Marketing Websites in Pakistan offer, and are ready to help you too!