In the ever-competitive world of ecommerce, finding effective strategies to boost conversions and drive sales for your ecommerce store is crucial. One strategy that has proven to be highly effective is offering free shipping to customers. By eliminating the extra cost of shipping, you not only entice more potential buyers, but also improve the overall shopping experience.
In this blog post, we will delve into the power of free shipping and its impact on conversion rates.
We were inspired to write about free shipping offers, by one of our clients, who have been on-charging customers shipping rates even for orders as small as $10. The cost of shipping would be about 30% of the total order value. They challenged us to convince them on why they should offer free shipping and how does it boost conversions. We knew from experience that it’s non-negotiable to offer free shipping, and so we were pleasantly surprised to see a lot of research behind this by many prominent industry players, such as Shopify, really delve deeper into this topic in their article titled – Does Free Shipping Increase Sales.
Understanding the Power of Free Shipping
Free shipping has become more than just a perk for online shoppers; it has become an expectation. A very large percentage of customers will often abandon their shopping carts when they realize there are additional costs associated with shipping.
In a recent survey run by JungleScout, they found that 80% of consumers will walk away from your website if there is no free shipping offered.
By offering free shipping, you remove this barrier and create a seamless shopping experience for your customers. This not only increases the chances of completing a purchase but also encourages repeat business and is one of the best ways to increase customer loyalty. Repeat business is good for sales – one of the easiest ways to increase your revenue.
Helps Build Trust and Confidence With Your Customers
When customers see the words “free shipping” on your website, it conveys a message of transparency and trust. As a customer you want to feel assured that there won’t be any hidden costs or surprises during the checkout process. This builds confidence in your brand and enhances the overall perception of your business. Customers are more likely to trust and buy from a store that offers free shipping compared to one that doesn’t.
Why Free Shipping Can Boost Conversions For Your Store?
There is a psychological aspect to the allure of free shipping. Customers perceive free shipping as a reward or a special offer, even if the cost is already factored into the product price. It creates a sense of excitement and satisfaction, making customers feel like they are getting a good deal. This positive emotional response can significantly influence their decision-making process and drive them towards completing the purchase.
In a report titled The Future of Retail 2019, they found that free shipping is the number one driver of online sales.
Overcoming Cost Concerns
As an ecommerce business owner, you might be worried about the potential financial implications of offering free shipping. But there are definitely long-term benefits free shipping can bring. You can decide to use free shipping as a tool to attract new customers, and only offer it to new customers on signup. By increasing your database of customers, you increase your overall sales volume. This, in turn, can offset the cost of shipping and even lead to higher profits. It’s all about finding the right balance between customer satisfaction and financial feasibility.
When it comes to cost vs revenue, I would choose to focus on revenue. Focusing on boosting sales is more important as it helps you sell more product, which means cashflow – something we all need in our business.
If you’re worried about the costs of free shipping, just ask yourself how much is it costing you not to offer it?
The Competitive Advantage
In a competitive ecommerce landscape, standing out from the crowd is essential. Offering free shipping can give you a significant advantage over your competitors. While others may be charging for shipping, you are providing an added value that sets you apart. This can help you attract new customers, retain existing ones, and position your business as a trusted and customer-friendly brand.
What Is The Psychology Behind Free Shipping?
Simplifying Decision-Making
One of the main reasons free shipping is such a powerful tool is because it simplifies the decision-making process for customers. When faced with the choice between two similar products, one with free shipping and one without, most customers are likely to choose the option with free shipping. It creates a sense of value and eliminates the need for additional calculations.
In other words, your customer doesn’t have to burn calories to calculate shipping costs.
Reducing Cart Abandonment
High shipping costs are one of the leading causes of cart abandonment. By offering free shipping, you remove this barrier and encourage customers to complete their purchase. According to recent studies, over 55% of online shoppers abandon their carts due to unexpected shipping costs. By addressing this pain point, you can significantly reduce cart abandonment rates.
Perceived Value
Free shipping creates a perception of added value for customers. Even if the actual product price remains the same, the absence of shipping fees makes the customer feel like they are getting a better deal. This positive perception translates into increased trust and loyalty, which ultimately drives conversions.
Free Shipping Real-Life Success Stories
One of the best indicators of the effectiveness of free shipping in boosting conversions is analyzing real-life success stories. Let’s take a look at two examples:
Zappos: The online shoe giant, Zappos, experienced a significant increase in conversions after introducing free shipping. By removing the cost barrier, they were able to attract more customers and build a loyal following. This ultimately led to their success as one of the top ecommerce players today.
Amazon: As one of the pioneers in the ecommerce industry, Amazon recognized early on the power of free shipping. Their Prime membership, offering unlimited free two-day shipping, has been a major driver of their success. It not only increases customer loyalty but also incentivizes users to make repeat purchases.
How to Implement Free Shipping to Boost Conversions
To maximize the benefits of free shipping, it is important to implement it strategically. Here are some tips to keep in mind:
Set Minimum Order Thresholds
Instead of offering free shipping on every order, consider setting a minimum order threshold. This encourages customers to add more items to their cart to meet the requirements, increasing the average order value.
Promote Free Shipping Clearly
Make sure customers are aware of your free shipping offer by prominently displaying it on your website, product pages, and marketing materials. Use attention-grabbing banners or pop-ups to catch their attention.
Track and Analyze Results
As with any marketing strategy, it is crucial to track and analyze the results of your free shipping offer. Monitor conversion rates, average order value, and overall sales to determine its effectiveness and make necessary adjustments.
So Does Free Shipping Boost Conversions?
We think free shipping is a powerful tool that can significantly boost ecommerce conversions. By addressing customer concerns, simplifying decision-making, and creating a perception of added value, you can attract more buyers and drive sales.
Offering free shipping can also boost your brand awareness. By embracing free shipping, you not only enhance the perception of your brand but also gain a competitive advantage in the market.
One of the biggest reasons for your online store to offer free shipping is to remove the barrier of additional costs, while also creating a seamless shopping experience that builds trust and confidence.
And now, let’s dive into some common questions related to free shipping:
Q: What is one of the main reasons why free shipping is effective in boosting conversions?
A: Free shipping simplifies the decision-making process for customers and creates a sense of value.
Q: How does free shipping help reduce cart abandonment rates?
A: High shipping costs are a leading cause of cart abandonment, and by offering free shipping, you remove this barrier and encourage customers to complete their purchase.
Q: Can you give an example of a successful ecommerce company that implemented free shipping?
A: Zappos, the online shoe giant, experienced a significant increase in conversions after introducing free shipping.
Q: Is free shipping really effective in boosting conversions?
A: Absolutely! Free shipping has been proven to have a significant impact on conversions by reducing cart abandonment rates and creating a positive emotional response in customers.
Q: How can I handle the financial burden of offering free shipping?
A: To overcome the financial implications, consider incorporating the cost of shipping into your product prices or setting a minimum order value for free shipping. This way, both you and your customers can benefit.
Q: Are there any downsides to offering free shipping?
A: While free shipping has numerous advantages, some businesses may find it financially challenging. It’s important to carefully assess your profit margins and find a strategy that works best for your specific situation.
If you need help in generating some ideas on how your store can boost sales by offering Free Shipping, you can contact us here.
Jovana Vujnic
Head Honcho | Marketing Automation Expert | Evil Twin Sister
Jovana is the Founder of Bumper Leads - a marketing automation agency that helps businesses simplify and automate their sales and marketing systems to help them save time and money.
She is a former body builder turned fast food junkie turned automation geek.
When she is not watching Cobra Kai on Netflix, she shares interesting marketing advice on our podcast called Marketing Automation Made Simple. This is where she helps overwhelmed business owners build smart marketing growth systems so they feel excited and in control of growing their businesses.
You can always follow her on social media to see what she's up to.