Can Free Shipping Make or Break an Online Sale?


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As a former big city girl living in Denver during my formative years and Chicago in my 20s and 30s, I always wondered what life in the country would be like but never enough to give it more than a passing thought. I was sure it would be too boring for me and that I would miss the hustle, bustle, and abundance of shopping and entertainment venues that had become part of my routine. The pace of rural life would simply be too slow for me and the lack of amenities would get very old very quickly.

It wasn’t until the late 90s that I really started giving the whole country living idea some strong consideration. Even though I loved Chicago and it’s still my favorite big city, I was burned out in my career and fed up with the daily grind. I just couldn’t do it anymore – the hour-plus commute back and forth each day, crazy people on the freeways, tolls, and the indifferent, stressed out coworkers and management team. Even a move back to Denver didn’t cut it. I was really being drawn to a quieter lifestyle to the point that I started reading voraciously about people who had made successful transitions from city to country life. Movies like Diane Keaton’s “Baby Boom” also fueled the fire to make the move, and I was clearly hooked on the idea of a simpler life. As luck would have it, I was starting to work virtually right around that time and an opportunity opened up for my husband at a Montana hospital, so we took it and stepped for the first time into a truly bucolic existence.

What I found when I first moved to Montana and then later to Vermont is that some things in rural America are surprisingly similar to city life but many things are poles apart. For example, businesses here operate at much the same pace as in the big cities, subscribe to similar operating objectives, and have a high level of dedication and commitment to the job. Once you leave the office, however, you notice a dramatic difference. Here we have something that city folks don’t have – peace and quiet that permeates the senses and pristine, pastoral vistas that surprise and delight. We have no billboards, no traffic congestion, no road rage, virtually non-existent crime, and a safe, family-friendly place for my husband and me to raise our teenage son. And, despite the occasional bump in the road that goes with living a country life, this is a slice of heaven I could never give up.

You may think that I am deprived of the necessities of life, like a daily Starbucks fix and culturally rich diversions like the theatre, museums, or the symphony, and in those respects, you’d be right. Those were certainly adjustments I had to make, and compromise was the name of the game at first. For example, I went into shopping withdrawal almost instantly. The nearest Walmart was 77 miles away and in an odd twist of reality, I learned that the basic necessities of life were found at the grocery and hardware stores. While the selection is understandably lacking, you might be surprised to learn that you can get some top quality socks, underwear, shoes, and jeans at a country hardware store, and some of the pajamas and jackets there are quite eye-catching, too.

While I can clearly survive well in a rustic community, and happily do so, there are undoubtedly some things that small town living cannot provide like access to all the latest best sellers, the newest technological gadgets, and a wider variety of clothing, accessories, and personal care items. For all of that, I turn regularly to the World Wide Web. Perhaps due in part to my rural existence, perhaps due to my frugal nature, I have become addicted to the charms of virtual shopping. Rather than drive two hours to the nearest mall, I can actively comparison shop in the comfort of my own home with merchants all across the country. I have even started buying grocery items online, which tickles me to no end.

I do have a sticking point, though. I only buy from merchants who offer free shipping and handling. Call it a pet peeve, but I just can’t stomach paying anything for shipping when I place an order. The merchants are saving major bucks on overhead by not having to operate a physical storefront, so in my humble opinion, the consumer should benefit with free shipping as a thank you. Sure, the cost of free shipping may be reflected in the prices advertised on the website, but for me, it’s the principle of the thing. I can have five items in my shopping cart and get to the checkout only to find that they’ve tacked on a $6.99 shipping charge (that actually happened this morning). Instantly, it sours the shopping experience for me and if I cannot find a free shipping coupon for the merchant online (or some kind of discount that will offset the shipping cost), I will close the browser window and effectively scrap the entire purchase.

I know that I’m not the only consumer who is put off by having to pay shipping and handling and I hope that merchants who do charge these fees will take note, because the impact is considerable. According to the DMA’s Guidance for Establishing and Substantiating Shipping and Handling Charges:

“Most direct marketers charge consumers for delivery of products. What the actual charges are and how these charges are calculated are significant issues for consumers.

More than 70% of consumers say they compare the total cost of a product, including shipping and handling charges, when they compare sellers. Those who shop online say excessive shipping charges is the number one reason they abandon their shopping carts before buying.”

What can be done? Merchants differentiate themselves during the holidays with competitive prices and free shipping and it clearly pays off, so why not continue that trend throughout the year? Or, at the very least, honor regular customers with free shipping any time they make a purchase. What a wonderful loyalty reward that would be from the consumer perspective, and businesses can benefit from the improved customer retention. Another option (my favorite) is to make free shipping and handling a permanent fixture, essentially turning it into a competitive differentiator that is prominent in all advertising. According to Forrester Research, 75% of customers prefer to shop with an online retailer that offers free shipping and per The Conference Board Survey, 90% of consumers say that free shipping also entices them to spend more online. That’s too big to ignore.

Thanks for giving this idea some serious consideration, online retailers. It’s just food for thought from a country girl who could be one of your very best customers with the right encouragement.

Republished with author's permission from original post.

Teresa Sinel
Teresa Sinel is the Director of Operations, Analytics and Innovation for VIPdesk, the award-winning pioneer of home-based virtual customer care solutions for global brand leaders committed to enhancing their brand experience. Serving over 40 client programs and 10 million customers, VIPdesk specializes in delivering Concierge Programs, Contact Center Services, and loyalty programs for national brand leaders in the travel, auto, financial services, real estate and retail industries.


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