High shipping costs are one of the main reasons customers abandon their carts. Research indicates that 42% of customers leave their carts because shipping costs are too high. Offering free shipping can be an effective strategy to reduce abandonment, but it raises a critical question: how can retailers offer free shipping without sacrificing profitability?
Shipping costs can be a deal-breaker for many online shoppers. When customers proceed to checkout only to see unexpected shipping fees, they may decide that the purchase is no longer worth it, even if they liked the product itself. This problem is further intensified when customers can easily shop elsewhere where free shipping is readily available. Even a small increase in shipping fees can significantly impact conversion rates, especially when competing stores offer free or discounted shipping.
Additionally, unexpected shipping costs can lead to frustration and lost trust, as customers may feel misled if shipping fees aren’t made clear upfront. Without careful management, shipping costs can be a major barrier to closing sales, making it essential for retailers to find ways to offset or strategically manage these fees.
42% of customers abandon carts due to high shipping costs (Source: E-commerce Trends 2023).
Offering free shipping has been shown to increase conversion rates by up to 50%, depending on the product and location (Source: Shipping and Conversion Research 2022).
Studies show that 63% of customers are more likely to complete a purchase if they know that shipping is free(Source: Customer Preferences Study 2022).
Retailers can effectively reduce cart abandonment caused by high shipping costs through strategic methods that make free shipping feasible. Here are several ways to make free or discounted shipping available without compromising profitability:
Offer Free Shipping on Minimum Orders
Setting a minimum order threshold for free shipping is one of the most common ways to offer this perk without impacting profit margins. For instance, you might offer free shipping on orders over $50 or $100. This strategy encourages customers to add more items to their cart, increasing the average order value (AOV) and making free shipping financially viable.
Finding the right threshold is essential. Setting it too high may still deter purchases, while setting it too low could impact profits. Experimenting with different thresholds can help identify the point at which customers are likely to add more items without hesitation.
Include Shipping Costs in Product Pricing
Another way to offer “free” shipping is to build the shipping cost directly into the price of the product itself. For instance, if shipping typically costs $5, adding this amount to the product price can allow you to advertise “free shipping” while still covering the shipping cost indirectly.
This approach works best when the price increase is minimal and doesn’t discourage customers from purchasing. For products with higher price points, ensure that the adjustment doesn’t impact the perceived value, as customers may notice a larger price difference.
Provide Free Shipping for Loyal Customers or First-Time Buyers
Rewarding loyal customers with free shipping can enhance customer retention and encourage repeat business. Offering free shipping to loyalty program members or on their birthday can create long-term value. For first-time buyers, a promotion offering free shipping can also be a great way to bring new customers on board.
Use these promotions selectively to maintain profit margins, and consider setting conditions for free shipping for loyal customers, like reaching a minimum spend. This approach incentivizes both initial purchases and ongoing relationships with your brand.
Use Free Shipping for Seasonal Promotions
Offering free shipping during special seasons (e.g., holiday sales, Black Friday, or back-to-school season) allows you to reduce cart abandonment and encourage higher conversion rates during peak shopping times. Highlighting the free shipping offer prominently during these periods creates urgency and may push customers to complete their purchases sooner.
Limited-time free shipping promotions can be especially effective for encouraging fast purchasing, as customers may feel they need to act quickly to take advantage of the offer.
What should be displayed on the product/checkout page?
Highlight the free shipping threshold: Display the minimum order amount for free shipping clearly on product and checkout pages to encourage customers to add more to their carts (e.g., “Free shipping on orders over $50”).
Be transparent about shipping costs: Provide estimated shipping costs early in the shopping process to avoid surprising customers at checkout. Being upfront helps set expectations and reduce abandonment rates.
How can you communicate this to customers via WhatsApp?
If a customer abandons their cart due to high shipping costs, a targeted WhatsApp message can remind them of your shipping promotions. For example:
“Hi [Customer], did you know you can qualify for free shipping by adding a few more items to your cart? Click here to complete your purchase and save on shipping! [link].”
You can also use WhatsApp to send limited-time promotions, encouraging customers to act quickly to take advantage of free shipping. For example, “Enjoy free shipping for today only! Complete your purchase now before the promotion ends: [link].”
High shipping costs are one of the top reasons customers abandon their carts, but by strategically offering free or discounted shipping, retailers can reduce abandonment rates and encourage customers to complete their purchases. Whether through minimum order thresholds, including shipping costs in product pricing, or offering seasonal promotions, these strategies make free shipping viable without sacrificing profitability. Personalized WhatsApp messages highlighting these offers can also help bring customers back and improve conversion rates.
What should be displayed on the product/checkout page?
Highlight the free shipping threshold: Display the minimum order amount for free shipping clearly on product and checkout pages to encourage customers to add more to their carts (e.g., “Free shipping on orders over $50”).
Be transparent about shipping costs: Provide estimated shipping costs early in the shopping process to avoid surprising customers at checkout. Being upfront helps set expectations and reduce abandonment rates.
How can you communicate this to customers via WhatsApp?
If a customer abandons their cart due to high shipping costs, a targeted WhatsApp message can remind them of your shipping promotions. For example:
“Hi [Customer], did you know you can qualify for free shipping by adding a few more items to your cart? Click here to complete your purchase and save on shipping! [link].”
You can also use WhatsApp to send limited-time promotions, encouraging customers to act quickly to take advantage of free shipping. For example, “Enjoy free shipping for today only! Complete your purchase now before the promotion ends: [link].”
