Shipping has become a competitive weapon in the war for e-commerce sales. Consumers most often purchase products from the retailer that offers the lowest shipping cost, most convenient and fastest delivery. So when Amazon offers fast, free shipping, retailers and wholesalers must find a way to fight through the clutter and capture potential customers through more creative tactics.
If you are currently running an online retail or wholesale business and are not selling through Amazon FBA, you may want to test free shipping independently to see how it impacts new and repeat sales. The following are six strategic moves when offering free shipping for your online store:
For small businesses with a limited budget, capturing an email address from a potential customer is key. Today, most people expect to input their contact information in return for something they want. If you are hesitant to offer free shipping to all customers, then follow Amazon Prime’s lead and focus on member-based incentives. Create a pop-up screen that promotes a “Free Shipping” offer in exchange for an email address. Gathering this information will allow you to market to that person in the future, even if they don’t purchase something right away.
According to a Forrester study, 44% of online customers abandon their shopping carts because of high shipping costs. If you have customers who leave items in their shopping carts for days, then offer free shipping as an incentive to complete the purchase.
If you’re a Shopify seller, you can take advantage of their Abandoned Checkout Recovery feature that allows you to send automated recovery emails encouraging people to come back to your store and complete their order. (Note: This is only available with Shopify’s Professional or Unlimited plans, but they also have several options in their app store that provide similar features.) If you can capture shoppers that are leaving items behind, you can add them to a list in your email marketing software and send them an offer code for free shipping.
For a lot of retailers, maintaining customer loyalty is all about a memorable and positive brand experience. To build credibility with a new customer, offer him or her free shipping. A friendly message saying, “Hey, we see you’re new! Let shipping be on us for your first purchase!” can make a huge impact.
If you want to take it to the next level, automate requests for new customers to share their purchases on Twitter or product photos on Instagram. At the very least, you should be capturing email addresses and encouraging new buyers to opt into your ongoing email campaigns.
Know of some customers who absolutely love your products? Encourage them to share their favorite products via social media in order to get free shipping on their next purchase. This is a great way to leverage the network of your most loyal customers. If they love your products, they’ll have friends and colleagues who will too.
To track success, use a unique discount code and social media tracking tools to see if this causes a spike in mentions, online discussions that include your brand and of course, purchases. You could even extend the “free shipping” discount to three of their friends, increasing the chance of purchase.
This test is best during holidays or other controllable, small chunks of time. Use holidays to offer free shipping and see if you see a higher response rate. Notify customers about your offer via email and through social media. Be sure to use a tool like Bit.ly to track links so you can test how successful your limited-time offers are. This is a great test you can conduct on a smaller level with the opportunity to scale.
If you are really not sure that free shipping is going to be a good fit for you, test shipping offers against ongoing discounts you already offer. Within several email marketing platforms, you can track the success of various A/B test campaigns. Split-test the discount against a free shipping offer and see which provides the most value for your business. As always, if an offer has a potentially large impact on your profit margin, ALWAYS test it. Whether it’s free shipping or other exclusive offers, looking to larger commerce players like Amazon can be helpful. Stay on top of the commerce and multichannel selling trends, then think of creative ways they can be applied to your business.