Shoppers hate getting surprises when they’re ready to check out, especially when it comes to cost. In fact, according to 99firms.com 67.91% of people abandon carts because of shipping and other costly surprises.
Free shipping is the #1 driver of repeat purchases with 45% of buyers preferring free shipping over other post-purchase experiences.
Let’s take a look at some quick facts:
Typically shipping charges will be between $5 – $10 for something like apparel. At an AOV (average order value) of $50 – $100, this is 10% of your revenue, or 20% of your net margin depending on the product being sold. This means that you’re going to need at least a 20% boost in sales to make up for the margin loss.
Not surprisingly, many merchants are forced to offer free shipping because their competitors do. One strategy to combat this is to offer ‘Fast shipping’ as an upgrade. Although most shoppers will prefer the free option, you can highlight this upgrade for buyers that wish to pay extra to receive their items the same or next day.
How much is the LTV (lifetime value) of your typical customer? In apparel especially, there is value just from getting additional customers in the door, as they will be wearing your brand and contributing to your organic marketing. Aside from that, you should be able to gather metrics on how often a customer buys from you and their average repeat order value. If this is significant, then offering free shipping is a no-brainer.
An alternate strategy is to offer ‘Free Shipping for orders over $50’. This will help increase your AOV as shoppers will purchase extra items just to reach this threshold and avoid having to pay for shipping.
Now that we have the mechanics sorted, let’s look at your website and how you should display your free shipping offer.
Here’s a collection of various ideas (desktop and mobile screenshots included):
So, which style should you use?
This will largely depend on your shopping cart and the available options. The best option is to split-test different ideas and measure which converts best.
Split testing options typically include configuring the header banner display, cart and checkout screen modifications.
Fortunately, at Online Visions we have the ability to test various optimisations on all the major shopping cart platforms
If you aren’t currently optimising your eCommerce store for maximum RPV (revenue per visitor), then you will quickly fall behind your competitors. We have seen strong increases in conversion rate for clients implementing Free Shipping optimisation tests.
If you are interested in obtaining more insights like this and improving your website user experience, head on over to https://www.onlinevisions.com.au/blog/ and subscribe to receive the latest optimisation tips and updates.