Comparison of transactions offering free shipping
Comscore, an online marketing and measuring service, has released a report and webinar in the last week estimating quarter one’s e-commerce spending and information. According to the service online retail spending increased to $38 billion dollars for quarter one, up 12% from last year. This is sixth consecutive quarter of year over year growth in the online retail sector. Gian Fulgoni, chairman of Comscore, stated that the increase in online spending was due to people wanting to take advantage of the Internet’s lower prices and moving spending away from offline retail stores. Also stated was that e-commerce had become a mainstay in consumer behaviour driven by the lower prices and convenience. The growth in the quarter was attributed to an increase in the number of people shopping online, which was up 7% and the amount transactions per shopper which was up 9%. However there was a 4% decline in the amount spent per transaction.
Nearly half the online orders included free shipping, “A lot of consumers are taking free shipping for granted,” said Fulgoni. The report concluded that 61% of shoppers would be “at least somewhat likely” to cancel their whole order if they were to be charged for shipping. One other interesting statistic from the report is online shops that do offer free shipping tend to see orders, on average, around 30% higher in value than shops that do charge shipping. In previous quarters (Q109) free shipping accounted for only 37% of orders and as you can see has only grown since then.
Given this information as a store owner can you afford to charge for shipping? If your items are quite large and bulky people will generally understand a shipping charge, if it’s fair. However if your customers are presented with a high shipping charge on check out, particularly for items that would be considered easy to ship, they may feel slighted and cancel the order. If you absolutely have to charge shipping can you package the cost into the price of your items or offset it some other way?
If you’ve switched to offering free shipping I’d love to hear what you have to say in the comments.
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i have been offering free shipping to all US states since i opened my shop last year. I DO beleive my sales are better because of it. It has definitely helped my business, without a doubt.