Wondering whether free shipping boosts retailers’ holiday sales? In short—yes. As we head into the final week before Christmas, there’s no doubt consumers everywhere are on the search for last-minute deals.
If you’re an online retailer, this is a prime time to offer free shipping, a deal that’s not only convenient—it just might cause a noticeable spike in your profits and conversions, too. And don’t think that even if they don’t take you up on an offer of free standard shipping but instead opt for expedited (and more expensive) shipping right now, that they don’t notice your offer of free. They do.
In general, retailers tend to offer different types of free shipping promotions. One might offer free shipping year-round on any order over a certain amount. Others opt to offer free shipping during certain high-traffic times of the year, such as the holidays. And still others might go for free expedited shipping for a limited time, with or without a minimum order requirement.
As you examine your own retail strategy, look at what you’ve tried—and haven’t. What offers do your customers seem to respond to the most? And if you’re like us, you’re continually testing your theories, the same way you might conduct a/b testing on a website or landing page. Testing is a critical component of retail success and it never hurts to offer a new promotion for just a few days—and use the results as a test to decide if a longer-running promotion is worthwhile.
And another tip? Think about what inspires you to buy. When we gather to brainstorm and develop promotions for retail clients, we solicit feedback from our entire team on what sort of incentives and messaging prove most effective and what might compel them to buy. At the top of every list? Free shipping.
A recent case study from Compete makes an interesting case for two types of free shipping promotions: a year-long free shipping discount with a minimum purchase requirement, and free shipping on any order during the holiday season.
As part of the Compete Fall 2012 Online Shopper Intelligence Survey, researchers analyzed the two aforementioned promotions from two retailers: The North Face and Patagonia. And while each promotion resulted in different outcomes like total search referrals and unique visitors, both sets of data illustrate one important takeaway: “Sixty-two percent of consumers said they would not have made their most recent purchase if they had not received free shipping. Clearly, free shipping is a must-have for consumers.”
Head on over to the Compete blog to read the rest of the report—it’s well worth it, we promise. And when you’re done, reexamine your own online retail strategy for the rest of the year. Have you already introduced a free shipping promotion to your customers? If not, what’s stopping you? Now’s the time to capitalize not just on last-minute holiday sales, but post-holiday purchases, too. And since customers respond so fervently to free shipping, doesn’t it make sense to give them what they want?
Online retailers, does your experience with free shipping mirror the results gathered by Compete? Or do you find other types of promotions to be more effective for your audience? We’d love to hear from you.
Image by khawkins04 via Creative Commons
Shelly Kramer is a Principal Analyst and Founding Partner at Futurum Research. A serial entrepreneur with a technology centric focus, she has worked alongside some of the world’s largest brands to embrace disruption and spur innovation, understand and address the realities of the connected customer, and help navigate the process of digital transformation. She brings 20 years’ experience as a brand strategist to her work at Futurum, and has deep experience helping global companies with marketing challenges, GTM strategies, messaging develoment, and driving strategy and digital transformation for B2B brands across multiple verticals. Shelly’s coverage areas include Collaboration/CX/SaaS, platforms, ESG, and Cybersecurity, as well as topics and trends related to the Future of Work, the transformation of the workplace and how people and technology are driving that transformation. A transplanted New Yorker, she has learned to love life in the Midwest, and has firsthand experience that some of the most innovative minds and most successful companies in the world also happen to live in “flyover country.”