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The psychology behind free shipping

June 08, 2012 Written by NetSphere Category: Shipping & Fulfillment
The psychology behind free shipping
When shoppers hear the word free, their ears perk up a bit. And believe it or not, their wallets are often prone to open up a little bit more, too. In the article titled “Is Free Shipping More Attractive Than A Dollar Discount?” published on GetElastic.com, studies show that free shipping can be more powerfully persuasive than a discount worth more.
 
According to GetElastic.com’s research efforts:
  • 61% online shoppers prefer to shop with a retailer that offers free shipping than one that doesn’t. — Forrester Research (2007)
  • 43% of shoppers abandon their shopping carts because of unexpectedly high shipping charges. — PayPal, comScore (2008)
  • 60% claim free shipping is a reason they are more likely to shop online. — Harris Interactive (2008)
  • 90% believe free shipping offers would entice them to spend more online. — The Conference Board (2008)

There are a few theories as to why shoppers flock to web purveyors offering free shipping. According to GetElastic.com, the first explanation lies in the desire to win.

“The ability to compare prices, find the lowest prices, skip parking lots and lineups — there’s a payoff vs. shopping in a store,” GetElastic editors explain. “The shipping charge negates that advantage – it effectively raises the total price paid and is like a ‘convenience tax.’ A dollar discount is easy enough to find in-store, so finding one online doesn’t justify the shipping cost.”

In these situations (and most other situations, for that matter), customers have a hunch that retailers can budge on the price. Shipping, on the other hand, is a fixed cost. When the retailer pays for it, the customer essentially wins. Furthermore, the customer still believes that they have come out on top, even if the retailer raised the price of the product (unbeknownst to the consumer) to cover the cost of shipping.   

The second theory finds its roots in perceived value.

In a separate post by GetElastic.com, research revealed that dollar discounts devalue a product while free shipping retains the perceived value. 

It’s important to remember, however, that regardless of previous findings, customers are finicky. Discover what best fits your demographic’s needs by doing a couple of test runs. Then stick with what equates to increased sales. No matter the end result, you can feel confident that your shipping policy is what makes your customers happiest. And isn’t the customer always right, anyway?

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Abbe Miller is the marketing manager at NetSphere Strategies, located just outside Chicago. NetSphere Strategies is a boutique eCommerce company positioned to help businesses transform their online presence by providing a full complement of services that starts with our strategic consulting and creative design teams, then continues with building innovative solutions and providing ongoing post-project support.