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Using Free Shipping to Increase Conversion

The e-commerce revolution has empowered a new world of innovative products—products that couldn’t survive the mass market needs of traditional retail but who can thrive by targeting hyper-specific audiences using the internet’s powerful demographic sorting tools. This hyper targeting, in turn, has given marketers a lot more latitude in how they connect with potential customers because their message doesn’t need to resonate with the largest possible audience. So, when Wharton University researched the topic, what do you think the number one marketing tool was for online retailers?

Free shipping. Not innovative products. Not personalized messaging, not even discounts! In fact, people were more likely to choose free shipping valued at $6.99 than they were a $10 discount in making purchasing decisions. The term “free shipping” has a powerful psychological effect on human buying behavior, so knowing how to deploy it effectively is crucial.

SET PARAMETERS AROUND THE DEAL

No business can afford to offer free shipping on everything without setting some parameters around the deal. The key is to reward the buyer behavior that best fits your product offering. If you sell high ticket items that people purchase infrequently, it makes sense to offer free shipping once buyers reach a given spending threshold. However, if you sell small ticket items that are purchased frequently and cheap to ship, it might make sense to offer free shipping for customers who sign up for a recurring plan.

PERFORM A COST ANALYSIS

Once you have an offer strategy, you need to do a cost analysis to determine what geographic regions make financial sense for your business. This is where your fulfillment provider comes in. Do they have relationships with carriers that allow you to reach most of the country in a reasonable period of time at a price that allows you to offer free shipping? Given the power of free shipping as a purchase motivator, it can be worth finding a fulfillment provider that helps you minimize shipping costs to your most popular markets.

PROMOTE YOUR OFFERS

Finally, don’t forget to promote your free shipping offers early and often. Shoppers should see a free shipping message soon after landing on your site, and spreading the message through social posts and ad buys can be a powerful driver for sales.

If you’d like to talk more about how to deploy free shipping in a cost effective way, we’d love to help. You can call us at 1-866-289-9010 or email us at sales (at) owd (dot) com.