2016 is drawing to a close and the holiday shopping season is in full swing. From free shipping to major discounts, businesses are throwing in all sorts of different promotions to gain customer attention. But how well are these methods working? Which are worth the time and cost, and which are just wasted efforts?
At Shippo we recently surveyed both US-based consumers and US merchants to find out what shoppers are expecting, and what other businesses are offering. Here are some of our most important findings.
1. Is free shipping worth it?
34% of consumers that took the survey responded that they will only purchase online with free shipping. However, the biggest opportunity here is that 63% of consumers indicated that free shipping only somewhat matters to them. The main decision point is price—if they can find the same product at total cost cheaper elsewhere, paying for shipping doesn’t matter.
The best tactic to use in this case is to pair free shipping with a certain action. Whether that be free shipping over a certain order value, or free shipping for a specific category of items (to clear out old inventory), make sure to always pair free shipping offers with a specific call to action for the customer.
2. Return shipping is more important
Many businesses often overlook the value of offering a simple return process. It’s usually considered a cost center to deal with returns.
According to our survey of consumers, 34% said that they will only make a purchase if they know that they can return or exchange an item for free. However, 59% of businesses do not offer a returns shipping service at all, suggesting a missed opportunity to reach a significant subset of consumers.
For instance Zappos offers a 365-days return policy that customers love. But realistically, those who will actually return their purchase will do it within a very short time period, while those who are on the edge may end up forgetting it completely. Since the time window is so long, many shoppers will never get around to doing the return at all.
By setting up a tactful return shipping offer, you can drive customers to both purchase more, and more often.
3. Shipping speed is less important than fulfillment speed
With services like Amazon Prime dominating the headlines this season, next-day or same-day shipping offers are often top of mind for competing merchants. However, based on survey results it may not be worth it.
Only 4% of consumers indicated that they would select same or next day delivery. Drilling down even further, merchants found that only 1% of their customers end up selecting the service when offered.
However, what is more important, is fulfilment time.
Up to 69% of consumers indicated that they expect to receive a shipment tracking number within 24 hours of when they click buy. So it’s important to keep on top of your orders to ensure that customers can see that their purchase is being processed in good time.
4. Diversify your carrier set
94% of consumers don’t care which carriers are delivering the package, yet up to 36% of merchants are only using one carrier.
By expanding your toolset with multiple shipping providers that cater to different needs, you can actually save on shipping during the holiday season. This will require the use of multiple carriers and utilizing the different service levels they offer.
For instance, Amazon only displays shipping options to buyers based on delivery estimates. But in the background, they use a variety of different carriers from UPS for those express packages to USPS for regular delivery, and regional carriers like OnTrac for localized deliveries.
There are many different ways for merchants to gain the attention of customers. The key is to get a pulse on exactly what your customers are asking for and providing those services to gain your competitive edge.
About the Author
Laura Behrens Wu is the co-founder and CEO of Shippo, the shipping platform that connects businesses with a global network of shipping carriers to print labels, track packages and more. Behrens Wu co-founded Shippo after personally experiencing the obstacles businesses face when setting up their shipping operations for her own e-commerce business.