What’s More Important – Free Shipping or Fast Shipping?
Thanks to retailers like Zappos and events like the Amazon Effect, today’s consumers are expecting the conveniences of free and fast shipping. Zappos set the stage by implementing free shipping and free returns in 2003 and free overnight shipping in 2007. Yet, the Amazon Effect propelled this phenomenon by offering free two-day shipping with the introduction of Amazon Prime membership in 2005—a bump up from Amazon’s free shipping incentive it offered back in 2002. Soon, retailers like Target and Wal-Mart matched the free shipping offer. Now, Amazon made one-day free shipping the standard for its Prime members in 2019 and enhanced same-day shipping offerings. As a result, consumers expect free and fast shipping.
While surveys suggest free shipping is more important than fast shipping, various conditions impact ordering decisions. So, it’s essential for warehouse managers and e-commerce store owners to understand what drives consumer motivations behind fast and free shipping and know how to leverage shipping software to support these delivery strategies while mitigating costs. Here are some essential factors to consider:
1. Free Shipping is a Top Pick for Consumers
Offering free shipping is crucial for attracting prospective buyers and retaining existing customers. The National Retailers Federation’s (NRF) Consumer View report shows that most consumers surveyed (75%) expect free shipping. Moreover, research suggests that free shipping is even more important than fast shipping to consumers. A 2016 Walker Sands survey revealed that free shipping out-weighed same-day shipping and easy returns as a priority by its respondents (88%).
The UPS 2019 Pulse of the Online Shopper report also highlights the significance of shipping costs to consumers as 43 percent of survey respondents noted shipping costs as a determinant in their buying decisions. The importance of free shipping also varies by country. A 2019 AlixParters report revealed that free shipping affects consumer ordering decisions the most in France (75%) and the United States (72%). Thus, offering free shipping impacts ordering decisions heavily.
Without offering free shipping, e-commerce stores risk losing potential sales. Even Etsy is encouraging free shipping by advertising online stores that provide this offer for the 2019 holiday season. So, e-commerce leaders need to consider offering free shipping to stay competitive.
2. But Fast Shipping is Crucial, Too
While consumers are typically patient with receiving their orders, they also have a threshold based on the product ordered and the urgency for the product. An Internet Retailer and BizRate Insight survey revealed that consumers were willing to wait three to five days for clothes but expected household items like cleaning supplies within 24 hours. Moreover, a 2019 survey from AlixPartners revealed that the average consumer expects the maximum delivery time for orders to be no more than 4.3 days.
E-commerce stores can risk losing sales and customer loyalty with delayed shipping as consumers can take delayed shipping as a cue to abandon their shopping carts. So, it’s still critical for warehouse managers and e-commerce store owners to consider fast shipping options.
3. Shipping Software Works as a Solution for Both
Warehouse managers and e-commerce store owners can use shipping software like ShipWorks’ to help facilitate fast shipping via automation tools and features. For instance, warehouse managers and e-commerce store owners can use ShipWorks’ Best Rate tool to help compare shipping costs and services across multiple carries all from one screen. They can also set up to choose the fastest, cheapest shipping option automatically by creating default settings to compare rates on factors, such as weight and same transit time.
ShipWorks’ Rules and Actions features also help speed up the fulfillment process by allowing warehouse managers to customize settings and automate tasks. They can also use ShipSense to automatically populate data from past order history in empty fields to enhance accuracy, speed up the fulfillment process, and support fast shipping.
Incorporating both free and fast shipping is ideal even as free shipping is more essential. But customers’ needs are a vital consideration, and shipping software is crucial for executing these strategies effectively. By using shipping technology like ShipWorks, e-commerce leaders can offer better support for implementing fast and free shipping offers and improve their bottom-line. Stay competitive by contacting ShipWorks to learn more about facilitating free and fast shipping.
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