How to reduce shopping cart abandonment is a key question for any ecommerce business. There are several different strategies and tactics that help resolve high abandonment rates, shipping rates are a biggie for consumers.
Here are 6 ways that you can save on your shipping costs to help reduce shopping cart abandonment on your ecommerce site.
Ecommerce businesses around the world can prune away their various overheads one by one, but one cost that stubbornly refuses to go away is that of shipping your products to the end user. Shipping costs account for 5 to 20% of e-tailers margins, depending on the product sold and the distance the item is being shipped. Most ecommerce businesses pass this cost on to the buyer, resulting in that dreaded result that no one dares to speak of – shopping cart abandonment.
One of the leading reasons why shoppers abandon carts online is the fact that the price of an item rises substantially once shipping fees are added to the basic tag price.
According to ComScore, at least 61% of users are likely to cancel their entire purchase if they eventually find that free shipping is not offered.
Here are six ideas to prevent this nightmare from striking your ecommerce business.
It’s every online retailer’s dream to offer free shipping at no cost. But we all know that there ain’t no free lunches in the world. So, be prepared to spend some money on shipping from your pocket, but only after you know you’ve made your margins.
Offer free shipping to your customers, but with a caveat. Have your customers purchase items above your break-even point and then go ahead and loosen those purse strings to offer them free shipping. Something like ‘Free Shipping above $50’ is music to the ears of an online shopper – makes them buy that much more, just to make the cut for free shipping.
This idea tries to walk the tight rope between keeping the customer happy and preventing you from bleeding dry due to shipping costs. By keeping the shipping costs significantly lower than competition, you retain the edge from the customer’s point of view, at the same time; by not taking the hit for shipping entirely from your pocket, you still make money on the sale. Win-win!
Old Navy.com does exactly this by offering a flat rate of $7 against all orders. They even offer free shipping for orders above $50.
Shop around for shipping companies that offer you the best rate. Strike a deal with the most affordable shipping company for a flat fee against an assured minimum number of orders per month. Check out USPS’s great options for flat rate shipping – here the cost not the shipping time is key.
When ecommerce business owners hear the done-to-death phrase ‘Go Mobile’ it’s usually in reference to making one’s website mobile friendly to cater to the growing population of smartphone shoppers among your target audience.
But here I refer to taking the backend of your ecommerce operations mobile as well. You could go with Shopify’s simple mobile POS setups and be truly mobile in every sense of the term. Still confused? Let me explain.
Imagine you’re at a trade show where someone liked your wares. Now you don’t need to make this customer log onto your website, make the purchase and then ship it over to them a few days later. When you go mobile, you eliminate the shipping part of the story entirely from the transaction. Hand over the item to your customer right there and swipe their card on your mobile POS. The inventory adjustments, invoicing and payment processing will all be taken care all in one place with this nifty attachment. Convenient and cool!
In every online retailer’s catalogue, there will always be those handful of items that don’t sell as much, but offer great margins every time they do sell. Incentivize the sale of high value, high margin items by offering free shipping on them. This way, the customer gets her ‘free shipping’ and you make more money on each order.
Customer retention is another scenario where offering free shipping is a great idea. We all know that repeat customers spend more money and shop more often on your site than new customers do. This means, there’s a definite value in retaining your loyal repeat customers. As a way of buying their loyalty, offer free shipping to customers who make three or more purchases on your site. Alternately, you could offer it to customers who make purchases worth over X dollars or more and so on.
Almost all traditional retailers, now have their own online retail channel creating a multichannel retail scenario. Multichannel retailers have the unique advantage of being able to hold inventory at store locations close to the homes of their online customers and fulfilling orders at zero shipping cost by asking customers to pick them up from their nearest branch.
This way, customers don’t have to wait for days to have the item delivered, they can pick up the items as soon as they are free to drop by the store.
Nordstrom pioneered this store pick up movement that everyone else is now aping. The surprise benefit of this model is that customers who come into a store to pick up an item ordered online, also end up buying something more from the physical stores themselves. In 2008, Nordstrom’s in-store sales went up by 8% and revenue grew 42% over four years.
When free shipping is not within your means or business model, try and change customers’ mindsets by offering them a different value proposition.
According to Forrester data, 11% of consumers reported that they stopped shopping on ecommerce sites that provided extremely slow deliveries.
Tap into this niche and offer same/next day delivery with paid shipping and delight your customers like your free shipping competitors can never hope to do.
With the amount of money, time and effort that ecommerce firms put in to attract a customer to their site and check out their products, it’s a pity when customers walk away without a purchase just because of something as secondary as shipping.
Don’t let shipping put a spoke in your wheels. Use any of these or some of your own creative ideas around shipping and make your customers keep coming back for more!
This was a guest post from Tracy Vides. Tracy is a content marketer and social media consultant. She works with small businesses and startups to increase their visibility. Although new to the digital marketing scene, Tracy has started off well by building a good online reputation for herself, with posts featured on She Owns It, Business 2 Community and elsewhere. She is @TracyVides.