Today’s consumer expects more. Since the pandemic, there’s been a boom in online shopping and companies both big and small have started to up their game to stand out from the crowd. Global ecommerce giants such as Amazon have increased customer expectations by improving the availability and speed of online purchases. The modern day consumer not only wants a seamless, stress free shopping experience, they also want fast and free (and sustainable) delivery.
In fact, a staggering 64% of consumers want their goods to be delivered free of charge and 67% expect their purchases to arrive within two days. Failure to meet these demands can cause the modern shopper to switch to another ecommerce brand to ensure they get their goods quickly and without any additional cost.
But why is fast, free and sustainable delivery so important, and how can ecommerce brands make this happen?
The Psychology Behind Free Shipping
The term ‘free shipping’ can be a great tool for encouraging curious shoppers to convert. The word ‘free’ comes with its own connotations – it instantly creates a compelling advantage for buyers as it suggests they’re getting a great deal, cutting costs, being rewarded, and entering into something without any downsides.
Consumers don’t like surprises. When they’re searching for something to buy, they see a price tag and decide if they’re comfortable with the price and whether they want to commit. They make their decision and then move further along the buying process. By the time they get to the checkout page, the addition of shipping costs can throw the carefully thought-out decision-making process off kilter.
61% of consumers are likely to abandon their cart if they have to pay extra for shipping. By adding delivery costs at the end of the purchase process, it means the customer has to calibrate their comfort levels and decide if they’re happy with the new price. This sows a seed of hesitation which can lead to a changed mind, an abandoned shopping cart, and a return to the search engine to find another brand that can meet that original price the consumer thought they were going to pay.
Ecommerce brands should always aim to get the consumer through the sales process as quickly and seamlessly as possible – with no added steps or surprises along the way.
The Psychology Behind Sustainability
21st century consumers are also becoming more ecologically conscious. Research by Trivium Packaging found that 74% of consumers were willing to pay more for sustainable packaging when it was offered.
Customers want to buy from brands that align with their core values and with more and more spenders taking an active approach to making sustainable choices, you can give your ecommerce brand the edge by making this simple change. By switching to greener packaging choices and being mindful of how much packaging you use, you can give customers what they want and keep the planet happy at the same time.
How Ecommerce Brands can Meet the Delivery Demands
Understanding the why is one thing, but executing the how can be another. We know that customers not only want, but expect, fast and free shipping. We also know that they’re more likely to lean towards ecommerce brands who take sustainability seriously.
But how do you make this happen as a business without having a negative impact on costs or failing to deliver on your promise? By factoring it into the cost, to upselling and tweaking certain choices, you can place your ecommerce business ahead of the game.
Factor delivery into the cost
One of the simplest ways of offering free shipping without taking the financial hit is to bake it into the product cost. While this may be a gamble as it raises the cost of your product, it does allow for a simplified cost structure, which many customers find attractive.
To calculate how much to add, you can look at orders made and the cost of shipping across a period of time. If your ecommerce brand sells lots of small, lighter products, you may notice that you only have to boost the selling price by $1 or so in order to offer 100% free shipping all the time.
Offer an upsell
One of the most popular ways to offer free shipping without stretching yourself thin or having to dramatically raise prices, is to use it to upsell products. You can do this by setting a minimum spending threshold to get free shipping, for example, if a customer buys over $25 worth of products, you can offer free shipping.
As an ecommerce company, you can look at your average order value and work from that. So, if customers tend to spend around $20, you can ask them to spend $25 to earn free shipping. This offer is attractive as customers will feel they’re getting more value by adding a $5 or more item to their basket, whereas paying the extra $5 in shipping costs may be a disincentive.
Look to loyalty programs
A popular way to offer free shipping while increasing customer loyalty is to offer free shipping as part of a membership or loyalty program. This is a tactic that Amazon uses with their Amazon Prime membership. By offering free shipping to repeat customers, or to those who have paid an annual fee as part of a membership program, you can increase the lifetime value of your customers.
Reduce shipping costs
In order to offer free and fast shipping, you may need to decrease your shipping costs to make it a worthwhile venture.
Here are some ideas how you can reduce your shipping costs:
- Compare the market to get discounted or more competitive shipping rates
- Reduce the amount of packaging and the dimensions of your parcels
- Switch from boxes to mail bags, if your product allows
- Partner with a 3PL service company along with choosing to outsource fulfillment
- Choose third-party insurers to trim the fat and cut down on your shipping costs
Once you’ve reduced your shipping costs, it makes it easier to balance the cost of free shipping for your customers.
Switch to Sustainable
Switching to sustainable packaging is important for ecommerce businesses that want to get ahead of the competition. Consumers want to work with brands that are committed to making a difference and the simple act of forgoing your plastic packaging can make all the difference.
Instead of plastic, you can choose paper, recyclable cardboard, biodegradable packing peanuts, paper or compostable poly mail bags. All these sustainable packaging options can reduce your carbon footprint and offer your customers a chance to make an eco-conscious decision.
