OTTAWA – Canada's online shoppers love a bargain when it comes to shipping fees, so much so that they 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.
Online shoppers' increasing expectations around free shipping are among the key insights Canada Post is sharing with e-commerce merchants in a white paper, "Is the price right? Designing an effective shipping pricing strategy." The country's No. 1 parcels company commissioned research to understand which combination of shipping options Canadians prefer. More than 4,000 online shoppers shared their views.
"Canada Post works with retailers of every size to support their growth and success in e-commerce," says Jennifer Mach, Strategy & E-commerce Market Development, Canada Post. "This research gave us incredible data, which we've used to offer small- and medium-sized merchants strategies and tools they can apply as they create, adjust or even experiment with their shipping strategy."
Shipping strategies have the power to drive – or to deter – online sales. Nearly two-thirds of online shoppers have abandoned their carts in the past due to shipping costs being too high. Conversely, 70 per cent of shoppers would shop more often with a merchant if they were offered free shipping with a minimum purchase. The paper's key findings include:
- Free shipping has become a table stake. Conversion rates drop by as much as 50 per cent if free shipping is not offered, and 66 per cent of online shoppers will sacrifice fast shipping for free shipping. Of Canada Post's top 100 e-commerce merchant customers: 56 per cent offer free shipping (48 per cent require a minimum purchase, and 8 per cent offer free shipping with no restrictions).
- Free shipping with a minimum purchase can tempt 40 to 60 per cent of shoppers to top up their cart to qualify for free shipping.
About Canada Post
As the leading parcel delivery company in the country, Canada Post delivers nearly two of every three parcels consumers order online. It works hand-in-glove with merchants, large and small, offering solutions that provide a superb end-to-end customer experience and greater convenience for their online shoppers.
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