There is no question that offering free shipping will boost your online conversion rates but how can you offer it in retail eCommerce without going broke? If you are not careful with your approach, offering free shipping is going to kill your profit margins and very soon, you might find yourself operating your business at a loss.
However, there are many ways in which you can make this profitable in retail eCommerce. By following some tried and tested techniques by leading eCommerce businesses that offer lots of free shipping on their sales, you will be able to maximize on your profits while accruing lots of sales and new customer acquisitions with your competitive edge. Businesses that offer free shipping on their products eventually see 15-30% boost in their net profits.
When offering, you need to think carefully about the risks versus potential rewards for your eCommerce business. Free shipping is generally a psychological persuasion strategy that works best for retail eCommerce business. It is going to have a positive impact on your order value, quantities, customer loyalty and your value proposition as a business.
Here are some strategies on how you can offer free shipping on your eCommerce store and still stay profitable:
Setup a Shipping Threshold
If you want to offer free shipping and still operate within margins, then you have to increase your threshold. You have to "force" your customers to spend more money on your eCommerce store in order to qualify which in turn leads to a massive boost on your sales volumes as well as profitability. For example, Give them, if order value goes beyond Rs. 300 or more on your store. You can even apply multiple shipping thresholds for various product categories. For example, spend more than Rs. 500 on vegetables & fruits or Rs.1000 on bakery products and get free.
Offer if they are willing to wait
If the customer is OK with slower shipping which is often cheaper, then you can offer them for free on certain purchases and shipping thresholds and still remain profitable. For example, if you typically deliver branded clothing within 24 hours with extra shipping & delivery charges while you can offer if customer is willing to wait three or more days for their orders.
Offer them for repeat customers
Offer free shipping for repeat customers will build the long-term customer loyalty that is essential for the survival of your business. This will be particularly profitable if you are selling high value products to your customers.
Offer free shipping for customer referrals
This is a classic case of killing two birds with one stone; selling your products to a customer while acquiring new ones. If you want to convert your customers into walking and talking lead generators as well as repeat buyers of your products, then you can offer them no cost for shipping every time they refer someone who purchases your products.
Offer if they subscribe to a weekly shipping plan
One of the advantages for a retail eCommerce store is of having a fixed weekly shipping plan. Products like fruits, vegetables and grocery required daily and customers often purchase in bulk and buying on weekly basis. So here is great chance to convert them in to subscription plan with this trick and still save lots of money.
Offer on slow-moving goods
If you have merchandise that has been sitting on your store for months, you can offer on these. It is best to do this on products with wider margins so that it can absorb the cost of shipping.
Offer on special days
Holidays always experience a sales boom and you can increase the sales further and build customer loyalty by offering shipping on all products purchased on a specific day.
Offer if customers download a mobile app
Mobile app is a great platform to turn your one time customers in to return customers. So, free shipping can be a way to promote your eCommerce mobile app for retail stores. You can provide free shipping when customers download and use apps to buy products in your store.
So, these are some of the best way to offer shipping without going broke. Are you a retailer? Do you use any tricks for shipping to improve your sales? Share your ideas with us by commenting below.