Get Your Shipping Mix Right, And Up Your Order Value

By Shippit | 26 Feb 2019

Here’s a cold hard fact: 60 percent of online customers will abandon their carts if they’re not offered free shipping. If you think about all the time, effort and dollars it costs to bring each customer to your site, that statistic starts to sting.

The logical solution to avoiding an exodus at checkout is to offer free shipping; well – not entirely. Yes, free shipping does have a place in digital strategy, but, it needs to translate to customer retention and profitability. Have you ever closely considered what basket value is required to justify free shipping? In instances where a blanket free shipping policy is applied, online retailers that don’t monitor their costs can damage their businesses and their bottom lines. Free shipping isn’t about winning the race to the bottom, it’s about value, consistency and transparency.

Online Shippers Loathe Surprises

Think about this scenario: you’ve been eyeing a new Bluetooth speaker, and you decide to bite the bullet, do some research and find it online at a great price. Then after adding it to cart and heading to the checkout, you’re slapped with an additional $50 delivery fee.

That’s not how consumers are trained to shop.

Let’s translate the psychology of the hidden surprise into a bricks and mortar retail experience. It’s akin to taking the Bluetooth speaker to the checkout and being charged for overheads like electricity, air conditioning and the salesperson’s time. Trying to trap your customers in the funnel by hiding your shipping costs is only going to drive cart abandonment.

Transparency and Options

99 Bikes ship over 900 items, ranging from those the size of a button to those the size of a fridge (an adult sized bike). They’ve managed to overcome the obstacle of shipping bulky items for free, all while profiting from shipping and increasing their basket value and customer satisfaction.

This is how: according to Tom Dodd from 99 Bikes, ‘free express shipping doesn’t need to be difficult.’ Cracking the seemingly impossible task of shipping bulky items across the country was a process of trialling various shipping strategies while monitoring profitability and customer satisfaction.

The key to getting it right is leveraging a broad mix of carriers and options to pick the smartest way of getting a bulky bike from A to B.

99 Bikes ship large and bulky items all across Australia. They tested a few different shipping strategies to alleviate the cost of shipping cumbersome goods over long distances because they saw an opportunity to use shipping as a factor of differentiation.

Let’s delve into detail around these challenges. According to Tom, ‘when a customer orders a large bike to a regional area, they expect to pay something because they’re aware of the distance. To find the sweet spot, you need to work out what the customer expects to pay. You’ve got to work out the cost to your business, versus the value the customer sees in the delivery.’

Ten Tips for Sorting Your Shipping Out

To avoid nasty surprises, and hoards of abandoned carts, be upfront about your shipping:

  • To offset shipping shock at the checkout, make sure your shipping policy and costs are clearly displayed through the shopping journey.
  • Customer expectations can be managed through education, but also, the UX of the experience.
  • There’s no one-carrier-delivers-all approach to shipping. Plug into a shipping platform that lets you leverage the smartest way to ship your goods to your destination.
  • Not all freight needs to be free, but it needs to be valuable. Look for opportunities to recover costs on large goods or remote locations.
  • Get your shipping policies and return policies right and display them loudly and clearly. From the product landing page to your FAQ’s, educate your customers around any charges or policies.
  • Road-test your shipping strategy, and experiment with a different mix of free shipping and flat rate shipping, as well as standard and express shipping.
  • Play around with free-shipping thresholds and monitor the impact it has on basket size.
  • Before you can understand profitability, you need to understand your margins and know what thresholds you’ve got to play with before wearing the cost of free freight.
  • Make sure you measure the results of your shipping strategies by monitoring your online reviews across social media and Google reviews.
  • Shipping can become a differentiator when the service you provide is reliable and fast. When you can consistently deliver to your customer’s all the time, you’ll build both brand and customer loyalty.

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