Small businesses adapted quickly to demand for on-line shopping in the last few years. Online shopping hasn’t slowed down, either. In a recent Jungle Scout survey, 72% of consumers said online spending either stayed the same or increased in 2Q 2022. Shoppers search and make decisions based on their most important criteria. According to the Jungle Scout survey, shipping costs rated highest in online shopping purchase decision making, as shown in this graphic:
While shoppers are used to free shipping offered by very large retailers such as Amazon and Wal Mart, it’s difficult for small businesses to compete. The increased cost may not be offset by an increase in sales. Some small businesses are finding ways to customize a free or reduced shipping policy that will pay off for them. Knowing the shopping habits and priorities of your customer base will let you offer an attractive shipping policy, especially if you are willing to make adjustments as you go.
Ways to make it work
Customers know that small businesses cannot always compete with huge enterprise companies. They seek small businesses for their flexibility, unique product and services, and to promote local job growth. When a small business can offer some kind reduced or free shipping policy, it can be a competitive advantage for them over other small businesses. Some ways to compete in this area include:
- Offer a higher rate for expedited shipping and a lower rate for standard shipping.
- Offer free shipping for purchases over a certain amount of money. When you know your profit margin will allow you to ship for free, especially on high priced items, this can boost sales.
- Offer bundled products with free shipping. Shipping related products together can reduce per item shipping costs, offering a way to increase sales while maintaining profits. This is popular for holiday shopping, for example.
- Offer loyalty programs. For customers who purchase a certain amount each year, shipping is free. This gives you a guarantee of a certain amount of business, which may make offering free shipping worthwhile.
- Subscription services, where customers pay an annual fee, can make it possible to offer free shipping. You can offer other perks including notices of upcoming sales, new products or other incentives.
- Offer free local shipping if it is less costly.
- Offer free shipping on a customer’s first order when they sign up for email or text notifications.
- Offer free shipping during holidays or as a flash sale.
- Offer flat rate shipping. Flat rate shipping offers advantages because it is straightforward to the customer and can be less expensive than other choices for the business.
- Offer free shipping on “select” items, such as those that weigh less or are very profitable.
Know your customer base
Statistics show some shoppers are willing to wait longer time for free shipping. A recent survey by Red Stag revealed that:
- Women are twice as likely to wait longer than men for products to arrive.
- Half of the people buying large products will wait more than seven days.
- Just 33% of shoppers for small goods want to wait more than a week.
- Shoppers aged 45 and older are much more willing to wait compared to younger shoppers.
- Younger shoppers are willing to reach a minimum order level to get free shipping.
Knowing your customer base can help you devise a shipping policy that matches shopping preferences. Small businesses will want to test different “ship free” programs to see which attract customers but retain profitability.
Get the message out
Shoppers look for your shipping policy on your website. A home page banner or call to action button explaining your shipping policy will get their attention. Remind them throughout the shopping and checkout process and let them know time or pricing restrictions. Your website designer can help you choose placement.
Send email announcing a shipping policy change to your customers or to those who have shown interest in your business. Be sure to include frequent notices in social media channels.
Improve SEO by adding the words “free shipping” to your title tags. Shoppers who include the words “free shipping” in their search will find you faster.
Offering free or reduced shipping can bring in new customers and increased revenues. Try out a few options now to see what works and be ready for the holiday shopping season.
Updating or creating a new business website can be time consuming and difficult. Contact us for help. Wheaton Website Services designs and updates websites that run flawlessly.