Free Shipping Offers are Definitely Not Dead.

I was reading an article on Free Shipping not being anything special or even a good deal anymore and that the US consumer wanted something better, or something more than Free Shipping from Online Stores when they are shopping.  I thought that the article was well written and had a point, but then again I also don’t believe that free shipping is even anywhere near dead.  Sure, small online retailers used to use it as their advantage as well as being tax free to compete with the larger retail chains, but now everyone is offering it, especially the larger retailers so it sort of spoiled the free shipping offer from being special and a huge advantage.  Then again, shipping charges and fees have also gone up so I would not personally count it out from being a great way to convince shoppers to come to your online store instead of shopping in a store or somewhere else.   However, there are a few mistakes some online retailers make and something that I tested with a Client recently to see if Free Shipping offers are actually dead or no longer work compared to saving a percentage off your total sales.

One thing that can easily kill free shipping from working is that some companies think that by jacking up their shipping costs and putting a banner that you get free shipping after you spend a certain amount like $99 or even $75 you will make people spend more so that they get the free shipping offer.  However from testing it with a ton of different Merchants who all fall for this piece of (what I think is) bullsh*t advice, it almost always turns out to hurt them instead of helping them and boosting their sales.  If you are including a banner for the amount you have to spend with free shipping, I always recommend you include some sort of script that calculates how much more you have to spend to get it to so you can show the consumer how close they are to actually getting the free shipping as well, unless your free shipping offer is coupon based.

You can easily offer free shipping on orders over $75 or $99 etc…. but make sure you also have cheap shipping options as well so you don’t scare off other customers who only want or are only willing to buy a couple small things.  I cannot tell you how many times I have abandoned shopping carts myself from companies who try to charge more for shipping so you up your order value for free shipping.

Now, with that said, even if you offer free shipping at a certain dollar amount, that doesn’t mean you cannot and should not try running campaigns for seasonal promotions or specials where everything or certain products or types of products or even brands and categories all get free shipping regardless of how much they spend.

Even though many people think that these deals are dead and no longer work, I recently decided to test a free shipping vs. a percentage off offer in two different email campaigns and in two different countries and I can say that I have seen that Free Shipping offers are definitely not dead.

With the email campaigns, I ran one with free shipping, the other had a coupon code for 15% off.  The 15% off in most of the cases was similar in price to the amount the consumer would have had to pay for shipping, however the free shipping did not include upsells, add ons or accessories so when the consumers did add these to their cart, they actually did end up having to spend on shipping on certain products so there were a few flaws with the campaign.  However, even with the test ad the flaws, the results came back solid and equal across the board.  Free shipping beat out the discount on a 2 to 1 basis which tells me that people still react to free shipping, even when the amount they save is about equal on the discount vs. the normal shipping price.

Now there are a few ways to run these tests.  You can send the emails out one week then the next, you can send out emails to half the audience where one half gets a coupon code and the other half gets free shipping and see what converts better, etc…

One way that I like to split test this is to offer two coupons on the landing page or in the email and let the person choose which coupon they want to use.  One coupon will offer a percentage off that is equal to the cost of shipping and the other coupon will offer free shipping.  Don’t tell them which equals which and let them use whichever code they would prefer to use.  I prefer to let the consumers try to figure out which is the better deal for themselves, then survey them to see why they chose which deal and why it was important to them.

The results alone, even if you don’t survey your customers should help you figure out if your customers would rather see their total bill shrink, or get their shipping free.  If total bill shrinks on products, you may be able to upsell them with expedited shipping and earn some extra money, but at the same time, they could have chosen the discount coupon so that when their spouse or significant other sees their credit card bill, they may not yell since they didn’t spend as much or could at least say they bought your products on sale.  There are lots of ways to argue out which would work, but until you test the offers and then blind survey your customers on why they used which coupon, you won’t actually know the real reason, but at least you’ll know which coupon or offer has a better shot of working and with which channel for your customer base.

Anyways, when I ran the email test for my Client on Free Shipping Vs. 15% off, the Free Shipping won by a landslide so for this Client, their audience prefers free shipping offers so in this case, the article that free shipping is dead or no longer cosidered a bonus is wrong.  I’ll definitely be running free shipping deals again since they appear to be working and out performing other offers much better, at least for my Clients, so if someone tries to tell you that free shipping is dead, tell them to give it a fair try and let the numbers speak for themselves.  You can also run split landing pages or split offers and emails and let the consumers show you which they would prefer.

Also don’t forget to try different dollar amounts or percentages off your total price to see what level and what discounts will actually turn the consumers from favoring free shipping to a percentage off so that when the next big holiday or shopping season comes around, you’ll be better prepared to further engage and capitalize on your customer base.

Not only will they be happy you are offering them deals that they react better to, but you’ll be happy since it should in theory help to increase your sales and better turn a profit from your campaigns.

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