The "frenemy" of online retailers – Trade Me adds ‘Free Shipping’ filter
Is Trade Me a channel you use? If so, you know that your customers can now filter by using a ‘Free Shipping’ option. With free shipping being one of the most powerful marketing tools in the online retailer’s arsenal, it is a positive feature for retailers and customers alike. Shipping and return costs are a potential barrier to buyers doing business with you. As an online retailer you want to remove as many of these barriers as possible.
Including shipping costs in the price of your goods, while remaining competitive, means you need to consider order value, size and weight, delivery time frame and destination. Daunting? Yes, but you don’t need to do it alone! By engaging with a Third Party Logistics provider (3PL), who understands online retailing, you can now access a network of courier suppliers and delivery options that are customized to your unique needs.
Stock positioning is another big advantage. For example, a 3PL supplier locating stock between North Island and South Island warehouses can remove even more risk. 3PLs also take care of stock management, storage, picking, packing and returns, on a scale that will lead to large savings in both cost and time.
There is a catch! It’s not only the shipping cost to consider when offering free shipping. Consider the increases in demand from a ‘free shipping’ promotion – what additional services would you need to manage this? Perhaps renting more storage space, managing stock levels, employing additional staff to handle a higher rate of orders, returns and queries – all of these can quickly diminish the gains.
Partnering with a full service 3PL means you can enhance customer service, such as providing a contact centre (phone and email) for product queries, post-sale support and offline purchasing negating headaches bought on by increased demand. A customer focused 3PL can provide the resources, knowledge and experience to increase sales and will quickly become an integral part of your business.
26% of online consumers say they switched retailers while purchasing online. 53% of those consumers said they switched because they found lower shipping prices with other retailers.1
85% of consumers rate Free Shipping as the No. 1 purchase incentive. 2
61% of consumers are likely to cancel their entire order if free shipping is not offered .3
44% of online shoppers abandoned carts because of the high cost of shipping and handling. 4
1. Forrester Research North American Technographics® Retail Online Survey, Q3 2010
2. National Retail Federation
3. comScore, May 2011
4. Forrester Research “Understanding Shopping Cart Abandonment” 2010