While nobody really knows who came up with the free shipping strategy, whoever it is revolutionized online retail in a huge way. It is now extremely common that online retailers who are not yet offering the free shipping option are missing out big time. How, you may ask?
Can Online Retailers Really Benefit from Free Shipping?
The benefits one could get from free shipping are pretty much obvious if you are a consumer, but if you’re an online retailer, not so much. However, offering free shipping could potentially benefit you in the following ways:
- Increase in Profitability: Based on a survey by comScore, 58% of the respondents have added products to their carts in order to meet the free shipping prerequisite and 83% of them are fine on waiting longer for their items to arrive if shipping is absolutely free. In addition, a majority of the respondents prefer seeing the estimated date of arrival instead of the number of days their orders take to arrive.
- Increase Competitiveness: In the landscape of online retail, free shipping is just one of the many instruments needed to stay competitive and keep existing sales to go up over competitors. For some online retailers, however, the sacrifices they make just to offer free shipping do not usually result in increased sales or a competitive edge. This simply means that they need to reevaluate their strategy and use free shipping to their advantage.
- Short-term Profits: A typical reason for offering free shipping is its ability to increase sales. However, take note that it could likewise result in bigger orders, more so when you set lower thresholds.
- Long-term Profits: According to the comScore survey, the majority of online consumers will only purchase from online retailers that provide free shipping. From this, we could conclude that you have a higher chance of getting more customers. Apart from short-term profit, however, it’s vital to take into account repeat customers and their overall lifetime value that your business would not have gotten otherwise if it wasn’t for your free shipping option.
Some Thing to Keep in Mind
You shouldn’t stop at offering free shipping alone. According to Complete Mailing Solutions, Inc., you must also explore other shipping strategies, use the right shipping solutions software for streamlining your shipping operations, and determine the most suitable combination of shipping options for increased profits and conversion rates.