We’re well aware that free shipping can work well as a sales driver, but the extent to which shoppers will go to qualify is very interesting.
Stats from a UPS study show that 58% of customers have added extra items to their shopping basket in order to qualify for free delivery.
So what does this mean for retailers, and how should they approach this issue?
Free shipping: the stats
According to the survey, four in five consumers see free shipping as an important factor when shopping online.
While you would expect that people would choose slower standard delivery options to save money, it’s surprising how many are prepared to spend more to reach the free delivery threshold.
Actions taken by consumers to qualify for free shipping (5,849 respondents)
So what should retailers do?
Well, the top result suggests that they shouldn’t necessarily offer free delivery as standard, but should instead offer it if a a certain threshold is reached.
Of course, this is something to be tested, and what works for one site may not work for another. Indeed, it could be that the simplicity of an across the board free delivery offer beats the use of a threshold.
According to James Gurd from Digital Juggler:
My view is that if you can offer free delivery without it compromising your business model, then that’s great value to the customer. However, it takes away the use of free delivery as an incentive.
At Betterware we always struggled to get the average order value up much above £24 due to the low ticket nature of the product. We used tiered delivery charges with free above £35 (not sure what they do now) to encourage higher average spend – the end result was an increase in AOV of about 20% with no damage to transaction volumes I.e. The higher spend to get free delivery didn’t result in customers just fewer orders, it actually increased gross revenue.
Should free delivery be standard? I don’t think it has to be but free delivery does remove one barrier to checkout conversion as has been evidenced by numerous studies. But it has to be commercially viable.
If you don’t offer automatic free shipping, then there are some useful ways to highlight the existence of a threshold and encourage people to spend a little more to qualify.
Here are a few examples…
This site has a £50 threshold for free delivery, which it shows in the navigation bar.
However, it misses a trick by not reminding people about this once they reach the shopping basket and checkout.
Nice clear message on the free shipping threshold from Lego, though the reminder on the shopping bag page could be more prominent.
The threshold for free shipping is $80, which is on the high side, but the reminder to spend a little more for free shipping is a good idea.
A good example here, as the red text is hard to miss. A further improvement would be to offer cross-selling options related to the item in the basket.
This is an excellent example. BayTree nudges shoppers about spending more to qualify for free shipping as they add items to the basket. This saves them having to go to the basket or checkout to find this out.
Brew Dog has no free delivery on offer, but encourages customers to make the most of the £7 delivery charge by buying more beer.
A good idea, and well illustrated with the bottle graphic, though the wording ‘maximise your shipping costs’ is slightly confusing.