Why Free Shipping Matters More Than Ever to Ecommerce Businesses

July 3, 2014 Rieva Lesonsky

free shipping

What’s the hottest product an ecommerce business can offer its customers these days? According to the third annual UPS Pulse of the Online Shopper Study, it’s free shipping.

The study found that free shipping is a major factor in shoppers’ purchasing decisions. Nearly six in 10 online shoppers (58 percent) say they have added items to their shopping carts in order to get free shipping.

In fact, shipping costs are often a deal-breaker. Fifty-eight percent of online shoppers admit having abandoned a shopping cart after they found out shipping costs were higher than they expected, and half say they’ve abandoned a shopping cart because shipping wasn’t free.

Free trumps fast when it comes to online shoppers. A whopping 83% say they will happily wait an additional two days for delivery if shipping is free, and one-third are willing to wait more than five additional days.

In addition, over one-third of customers say at some point they’ve chosen to have purchases shipped to a store for pickup so they can avoid paying for shipping.

Last, but not least, return shipping costs significantly affect purchasing decisions. Some 82 percent of consumers say they’re more likely to complete a purchase if they can either have free return shipping or return products in-store. Two-thirds say they always look at a retailer’s return policy before making an online purchase.

Takeaways for your business:

  • While Amazon and Google are testing versions of same-day delivery services in select markets, the UPS survey suggests customers are far less concerned about getting purchases fast than about getting them free. Most customers are not willing to pay the significantly higher cost for same-day delivery. That’s good news for small retailers who can’t afford to eat the cost of one-day shipping.
  • Free shipping trumps just about everything else you can offer a customer. You don’t have to offer free shipping on every purchase, either; free shipping above a minimum purchase level, such as $50, $75 or $100, is enough to spur buying.
  • Free returns matter more than ever. If you can’t afford to offer free returns, consider enabling consumers to return products to your store.
  • Offer the option to have a product shipped to the store—then spur more shopping by giving the shopper an in-store-only coupon when they arrive to pick up their package.
  • Eliminate shipping surprises. Shoppers want to see the total purchase cost early in the checkout process, so don’t hide shipping costs until the last minute.

Learn about ecommerce website building services from Web.com.

Author information

Rieva Lesonsky

Rieva Lesonsky

Rieva Lesonsky is CEO of GrowBiz Media, a media and custom content company focusing on small business and entrepreneurship. Email Rieva at rieva@smallbizdaily.com, follow her on Google+ and Twitter.com/Rieva, and visit her website, SmallBizDaily.com, to get the scoop on business trends and sign up for Rieva’s free TrendCast reports.

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