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Free Shipping Drives Customer Recommendations

UPS’ 2013 Pulse of the Online Shopper study was recently released for download, offering valuable insight for ecommerce retailers into consumers’ attitudes on shipping, delivery, and the entire operations process. This study asked over 3,000 ecommerce consumers about everything from reasons why they abandon their carts, to what they expect when they click ‘buy’, to what improvements online retailers can make to their sites to improve the customer experience. Fascinating stuff for retailers, consumers, and suppliers in the industry like us!

One of the most interesting parts of the survey, in my opinion, was the question that asked customers what service features made them offer positive retailer recommendations to other consumers. Honestly, with all of the hype we’ve been hearing in the fulfillment industry around this topic, it was no surprise that the clear winner was free shipping!

UPS Recommendation Graph 2013

So what does this mean? Well, the most obvious takeaway is that free shipping not only encourages sales but also drives referrals, too. With that in mind, it’s never been more important than now for retailers to find ways to offer free shipping in some form or another.

Let’s back up: just because it’s called FREE shipping doesn’t mean you have to eat the total freight costs to send an order. There are several methods that savvy retailers use to either 1) recoup the cost of shipping from customers so it’s not really “free” or 2) get creative with ways to offer it without breaking the bank. Here are a few of our favorite strategies:

  • Free over a certain order value: “Spend $100, Get Free Shipping!”. This can help offset shipping charges.
  • Free as part of a membership club: Think Amazon Prime. The annual/monthly fee ends up paying charges upfront in many cases.
  • Free on certain items: Have products that are super cheap to ship or have a high-profit margin? Those make great “free shippers”!
  • Free to certain addresses: Have certain zip codes or shipping zones that offer the cheapest rates? Custom-tailor your visitors’ web experience so that only those with an IP address in that area see a “free shipping” offer

No matter what you decide to do, it’s becoming more imperative that online retailers accept the fact that free shipping as a promotional offer is here to stay. Now that you understand that it’s more than just a deal-closer, but a word-of-mouth marketing tool too, it’s time to start identifying ways to work it into your promotional strategy!

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