For over a decade, free shipping has been the most popular type of online sales promotion – reaching a point where it’s no longer a bonus but an expectation for customers. Studies have shown that almost 70% of website carts are abandoned due to unexpected costs such as shipping fees.
Being upfront with shipping fees and any other hidden costs is essential to operating your online business smoothly and efficiently. But is free shipping really the best option?
Customer Bias
Like any other decision a customer makes, their psychology for making a decision is deeper than you may think.
For example; if a customer adds a product worth $10.00 into their cart but sees a shipping cost of $5.00, they have a very high chance of abandoning their cart. But if that same customer added a $15.00 product with free shipping, they would then be enticed to continue with their purchase – as the customer is likely to regard the product as higher in value, while receiving a shipping bonus – thus being more likely to complete the purchase.
The simple method of offering free shipping while putting the actual shipping price into the product price reduces the friction of customers seeing high shipping costs. This makes their decision to purchase a more positive experience and they may return to purchase again in the future.
Shipping Fees
Free shipping is a great choice for many retailers to help boost their sales of lower-value products. Sometimes, it may be better to keep or even increase the price of shipping.
Now, consumers are more likely to take more time to make a more precise and informed choice when purchasing a product online. This may allow you to keep a higher shipping cost with larger items, for example; with a larger item like a piece of furniture, the customer is less worried about the cost of shipping and more tuned-in to the actual price of the product. Customers know that shipping products of that size isn’t cheap and will be willing to pay the shipping cost as long as the product is what they’re looking for.
Conclusions
The psychological aspect of shipping costs is an interesting topic and can be studied and optimized for improved sales. Free shipping is becoming more essential for small products but in some cases, larger shipping fees could be expected with larger products.
