A lesson on how to offer free shipping with no restrictions without breaking the bank

Canada Post

E-commerce represents a growing percentage of overall retail sales,. As a result,  how you handle your shipping will become an increasingly significant part of your business.

We know that shoppers routinely compare prices across merchant sites prior to making a purchase, and that shipping costs are always top of mind.

READ ALSO: What shipping pricing strategy makes sense for your business?

So much so that shoppers will sacrifice fast shipping for free shipping, buy from a competitor who offers free shipping, or even delay their purchase because they expect a merchant to offer free shipping soon as part of a promotion.

Why not give them something to work with, then?

Free shipping is expected. While many merchants do offer free shipping with a minimum purchase threshold year-round, to sustain sales and remain profitable, there’s a benefit to tweaking that strategy during those periods when competition and shopper expectations are at their highest.

According to one study, 66% of shoppers said free shipping offers would entice them to buy during the holidays. In fact, free shipping with no restrictions was the most desirable promotion overall, with 71% of shoppers ranking it in their top three.

Implementing free shipping with no restrictions is a perfect opportunity to expose your brand to a new segment of shoppers during peak selling periods, such as the holiday season or back to school, when they’re engaged and ready to buy.

Be aware, however, that this would be a marketing investment and not an immediate money-maker. While this type of short-term promotion could mean eroding margins and a decline in your average basket size, consider the benefit of infusing your business with an increased opportunity during crucial selling windows.

AND can lead to a marked increase in a customer’s lifetime value, yet merchants need to implement offers wisely with a plan in mind.

Read our recent whitepaper to see how shipping offers can impact conversion.

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With increased competition during the holidays, retailers continue to push promotions earlier to lengthen their selling season. That’s why it’s vitally important for you to reach shoppers during the early stages, when they’re still researching brands and products online.

Timing is everything. You’ll want to sync your shipping promotions with key selling periods like Black Friday and Cyber Monday – both of which are now stretching into weeklong affairs – to get the most bang for your buck.

While free shipping with minimum purchase promotions have performed well during past Cyber Weeks and Boxing Weeks, recent Canada Post research** indicates retailers offering free shipping with no restrictions see the greatest increase in shipping volumes.

During 2015 Cyber Week, merchants that initiated a sales promotion plus a free shipping with minimum purchase offer saw a 61% volume increase compared to the prior week. But those merchants who offered free shipping with no restrictions experienced a 135% increase in volumes.

This 74% increase in volume with a no restrictions shipping promotion speaks to the impact such an offer can have when timed right.

Want more insights on how to ace the upcoming holiday season? Take the guesswork out of planning for the 2016 holiday shopping season.

But that doesn’t mean you should forget about attracting customers and boosting your profits through well-timed post-holiday pushes as well.

Gift card recipients will have cash to spend — potentially buying items they thought they might be getting, but didn’t — and a well-timed shipping promotion could make all the difference here.

Encourage repeat buyers. What about awarding loyalty club members or other top customers with the best offer you can muster — say, free shipping with no restrictions for a limited amount of time — along with the ability to extend such savings to friends?

Perhaps you’d like to create your own event? Many merchants implement their own free shipping events throughout the year to create some short-term buzz or line up to key seasonal selling periods for their business.

Source: canadiandailydeals.com

Lifestyle and book seller Indigo dropped their regular “free shipping on orders over $25” for a weekend in March, for instance.

By capitalizing on the right promotional periods for your business and shoppers, you’ll capture on last-minute buying interest and boost revenue.

Savvy buyers will be hunting for deals even as they shop. As you plan your strategy around a free shipping with no restrictions offer, ensure that you’re thinking through promotion across your marketing channels.

Get the word out. Multi-channel promotions can drive additional eyes towards your site and create further selling opportunities, potentially helping to offset the investment you’re making in implementing a no restrictions shipping offer.

What about implementing a holiday countdown with dynamic flash banners to create a sense of anticipation? Or generating an early bird effect by baking a social media component into your shipping offer?

Many brands turn to Facebook, Twitter and Instagram around the holidays simply because more people are engaged and anxious to share.

Deploy a pop-up or a bold graphic to tell shoppers that you offer free shipping. Use phrases like “one-day only” and “for a limited time.”

Final tip: Understand the implications. While offering timely free shipping can be a powerful motivator, many online stores offer it without really estimating how it will impact their bottom line – and how difficult this feature can be to reverse once implemented.

You’ll likely see eroding margins at the outset, but the additional selling opportunity should help offset these costs over time.

** Source: 2015 Canada Post Holiday Monitoring Study 2015, March 2016

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