There are two ways to look at free shipping as an online retailer – on one hand it can cut into your bottom line, and on the other it can encourage more people to follow through with an order.
If you’re unsure whether the benefits of free shipping really factor into consumer’s minds, we’ll breakdown the benefits with a case study.
A client of ours was recently experiencing a relatively low 1.5% conversion rate on their eCommerce site, which didn’t add up when we looked at the high amount of traffic they were receiving.
Analysing their website we discovered that a huge issue for them was abandoned carts and few returning customers. To remedy this we suggested that the client should trial free shipping on domestic orders within Australia.
Free shipping is a huge incentive that encourages consumers to follow through with an order online, with statistics showing that 28% of shoppers will abandon their cart if they come across unexpected shipping costs.
To promote the new policy we implemented social media advertising to reach new audiences and inform existing ones that free shipping is now available Australia-wide from the site.
Since trialling free shipping and promoting it, the client’s conversion rate has doubled to 3%.
To combat cart abandonment we also helped the client to set up automatic emails that are distributed to customers who leave the site before completing a purchase, offering them a 10% discount if they complete their order. This led to a 26% decrease in cart abandonment.
To some a 3% conversion rate may sound small, but in reality it’s a significant increase in profits for the business, all through a tweak to their shipping policy – showing that consumers might be happy to purchase goods worth hundreds of dollars, but the $10 shipping fee is the straw that breaks the cart’s back.
If you’re an eCommerce retailer and would like to know more about your conversion rates, be sure to check out the Emote Digital conversion calculator. For general help with your marketing or eCommerce website you can contact the friendly Emote Digital team today.