Does free shipping increase sales?
This is a question that many Shopify store owners are asking themselves. There's a lot of evidence suggesting that it does (orders with free shipping are often 30% higher in value compared to paid shipping ones).
But is it the right model for your business? How can you use free shipping in a way that increases sales without impacting your revenues?
In this guide:
- Pros and cons of free shipping for ecommerce businesses
- How to make an effective free shipping strategy that ecnourages shopping
- Connection between free shipping and ecommerce customer loyalty
Not quite what you expected from the content? Consider these related reads:
- How to Create Shopify Discount Codes to Grow Sales
- Customer Retention Marketing Guide [+8 Strategy Examples]
- 10+ Strategies to Drive Traffic to Your Shopify Store with Examples from Brands
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How to Use Free Shipping to Encourage Online Shopping: 4 Things to Keep in Mind
Here are the 4 main things you should think about to make sure that free shipping strategy increases your conversion rate.
This is the first thing you need to really consider when planning out free shipping options. It’s probably not a good idea to offer free shipping across all your stock. This will really cut into your margins, especially if you are a smaller retailer. Look at the higher turnover items, or the more popular items, and think about which might convert more with free shipping. Once you have decided which items you are going to offer free shipping on, a good way of offsetting extra cost is by spreading the cost across your whole inventory. In this way, the price increase across the board will be smaller and more hidden from your customer.
You can also make free shipping seasonal, and think about placing it on items that are projected sellers for that season. And, of course, you could have a universal free shipping offer set for special occasions, like Christmas.
And don’t rush into free shipping without doing some A/B tests first. If there is no difference in sales, or only a small difference, then why bother taking the hit for free shipping.
This should be an obvious point, but is worth mentioning. Take product weight and dimensions into consideration before deciding which items might qualify for free shipping. Most big online retailers have free shipping offers limited to lighter and smaller items for a reason: cost.
Going back to what we said above, you should also be aware of the kind of items you want to offer free shipping on. Think about seasonal big sellers, high turnaround lighter items, etc.
The thing with free shipping is that it doesn’t have to be a one size fits all thing, you can experiment with offering it across different items in your stock. Be creative.
Another great strategy is to place an order size threshold qualification for free shipping. Now, this limit should be reasonable, think about setting it around your average order price or slightly above (and you shouldn’t forget to factor in average product weight and dimensions too)- a good start point would be maybe $25 -$40.
There is some great evidence that proves that adding a free shipping threshold drives extra sales. A 2015 UPS/comScore study showed 52% of American shoppers have added extra items to their cart to qualify for free shipping
It is also a good idea to experiment with pop-ups or apps that let your customer know that they have almost reached the free postage threshold.
The first point to consider is where your customer is. If you are a US shipper and your customer is in the US, free shipping is a whole lot cheaper than it would be if your customer was in the the UK. That’s why you should consider putting geographical limits on your free shipping policy.
Free Shipping and Customer Loyalty: What's the Connection?
"Does providing free shipping to repeat customers increase their loyalty?"
Research says that 53% of customers say that free delivery is the number reason why they buy online. To them, it's a way to reduce the total price of orders, which is something that they appreciate. So, free shipping might be a way to build customer loyalty in a large share of your existing customers.
So, your customers prefer to get a product shipped to them for free instead of going to going to a physical store and inspecting the product. That's why consider giving free shipping to encourage shopping at your Shopify store. And, mention free shipping in your marketing messaging. If this is something shoppers appreciate, then it can draw more attention to offers and deals that you share.
Free Shipping To Increase Shopify Sales: Final Thoughts
Don’t fall into the trap of thinking that offering free shipping gives you marketing edge. It should be an essential (and profit driving) part of your service but it shouldn’t be one of your store or brand values. As David Kravitz of Fairytale Brownies said, "I don't want to be the company that people come to because of free shipping."
If you make free shipping one of the strongest incentives for online shopping, you might be taking your customer’s attention away from other real key selling points like range, price and customer experience. After all, anyone can offer free shipping, but not everyone can offer a great customer experience.