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6 Benefits that Free Shipping can Offer Your Online Stores - SearchNative
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6-benefits-that-free-shipping-can-offer-your-online-stores

There was a time when free shipping was considered as an add-on or bonus feature for e-commerce businesses. But not anymore! Now it has become more of a necessity to remain competitive rather than some extra benefit that businesses provide.

A ComScore report earlier this year stated that nearly half of all the online orders today include free shipping. Another study also revealed that 73% of the customers shopping online consider ‘free shipping’ as a critical factor in their purchase decision. Free shipping may not be ideal for all of you; it is an added extra cost that can be bypassed, right? Wrong. Consider it as an investment instead that will eventually pay for itself in multiple ways.

So let’s look at 6 key benefits that you can reap by offering free shipping on your e-commerce store:

  1. Increase Your Sales

    A free shipping offering has high appeal among the shoppers. Of course, because it’s FREE! But offering only free shipping can also work wonders for your e-commerce store. A survey carried out by a blogger published his findings on compete.com. The results were as follows:

    which-of-the-following-would-encourage-you-01142010

    You can see that free shipping is the clear winner here and the biggest influencer in encouraging shoppers to purchase more products online. Moreover, a Wharton Study stated that 61% customers are likely to cancel their purchase if free shipping is not offered. Adding free shipping is a definite way to increase sales conversions and drive more sales.

  2. Boosts Average Order Value

    As mentioned earlier, a large number of customers could be inclined to cancel their purchase or abandon their carts if free shipping is not offered. Offering free shipping, however, can reverse this and even encourage the customers shopping online to add more to their carts, contributing to a major boost in the average order value.

  3. Works as Percentage of Discount

    According to a study in the article on the Retention Science Blog, free shipping is 2x times more effective than the percentage discounts. More than a 100 million transactions were analyzed for this study. While it is not really recommended to follow the stats blindly without your own research, this study does shed some light on the audience behaviour and what kind of offers may work best for your business.

  4. Reduce Shopping Cart Abandonment Rate

    One of the primary reasons why people abandon their shopping cart is because they were unexpectedly presented with the unexpected costs.

    why-do-online-shoppers-leave-without-paying

    These unexpected costs usually come in the form of shipping charges. It was way back in 2011 that ComScore reported 61% consumers are most likely to cancel their order and abandon cart if free shipping is not offered.

  5. Loyal Customers Love Free Shipping

    Loyal customers are important! To put this into perspective, consider the study carried out by Bain & Co. which stated that increasing customer retention rates by just 5% can increase profits by 25% to 90%. That’s how important loyal customers are!

    Free Shipping and customer retention are associated with one another. Offering free shipping does not only help acquire new customers but also encourages the previous customers to shop through your e-commerce store again. An email or an advert of such an offer can also serve as an effective marketing tool to promote your business to new customers and retain the old ones. This can be validated by the UPS and ComScore study that stated that 54% of shoppers are most likely to take next progressive action upon receipt of free shipping offer by email. The customers that receive these emails are already familiar with the store and the business, and that loyalty can be effectively boosted upon receipt of such special offer.

  6. Gain Advantage Over Your Competitors

    With the ever-increasing competition in the market, even a slight difference in product valuation can be a cause of success or failure. Offering free shipping can give your business that required edge over your competitors in today’s market. Any holiday season can be considered as the most crucial and competitive time of the year for e-commerce stores. According to a survey conducted by Stamps.com, 64% of the online shoppers pointed towards free shipping promotion as the most effective holiday promotion.

Conclusion

If you’ve not started offering free shipping to customers yet, now is the time to take the initiative. Be the Santa for your customers this Christmas ;). Feel free to share your views in the comments below.

AUTHOR: Abhishek Paliwal

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