By Karen Axelton
What two little words are most likely to get online browsers to buy this holiday season? According to comScore, they could be “free shipping.” MediaPost says the research firm reports in that the percentage of online transactions that use free shipping as an incentive has increased each week for the past year compared to the prior year, back to November 8, 2008.
As a retailer, what are the benefits to you of offering free shipping? First, ComScore’s most recent holiday season data shows “the average order value” for purchases with free shipping is about 15 percent higher than when customers paid for shipping. So you’re likely getting consumers to spend more.
Another benefit, of course, is simply getting them to buy at all. I shop online all the time, and so do most of my friends—and I don’t know anyone who pays for shipping. Especially if it’s something you’ll likely have to return, like clothing that doesn’t fit right, who wants to spend good money just to try something on?
Online shoe retailer Zappos.com famously made its name selling a product people said couldn’t be sold online by offering free shipping—both ways. The strategy overcame consumers’ worries about buying shoes online.
Some companies offer limited-time free shipping offers; others offer free shipping at all times for purchases over a certain amount, so they don’t get stuck paying free shipping for a $2.95 item. Think about what your customers need and how they buy. If you set a minimum purchase requirement, make it reasonable–something where customers buying two or three items will meet the requirement. This often spurs people to buy more than they otherwise would.
Holidays or no, free shipping is rapidly becoming a consumer expectation when buying products online. How will your company deal with this new reality—and profit from it?