Nowadays, e-commerce is becoming massively popular, so it’s only logical for you as an e-commerce business owner or a manager to search for new ways to get more buyers who’ll turn into loyal customers.
Free shipping is certainly one of the most popular tactics.
In this article, we’ll discuss the reasons and numbers that explain the psychology behind free shipping that attracts new customers and keeps the old ones returning for more.
The pain of paying
As a business owner, you might’ve already heard about the “pain of paying.” If you haven’t, here’s what it’s all about.
The pain of paying is a term for humans’ adverse emotions when purchasing something. Such feelings occur because of our nature – we don’t like to lose. We want to avoid losses whenever we can.
When you make a payment, even though you buy something, you “lose” money, and that feeling is sometimes even more substantial than the feeling of gain.
Of course, some purchases hurt more than others.
The psychology behind free shipping shows that most shoppers hate losing money when paying for shipping. Additional costs such as taxes and paid shipping are one of the top reasons why customers abandon their carts. So, it’s no wonder that many e-commerce companies, with Amazon as the industry giant, decided to offer free shipping to diminish this pain of paying and keep their customers on their way to purchase.
The importance of free shipping
As we already mentioned, one of the top reasons why around 70% of customers abandon their online shopping carts is an unexpected cost, and free shipping falls into this category. The psychology behind free shipping tells us shoppers want free shipping from their online sellers. Most shoppers will be OK with paying a slightly higher price if it includes free shipping, which can sometimes seem mind-boggling.
However, offering free shipping can serve as an excellent stimulus for reaching new prospective buyers and retaining new ones.
For example, Notino, a popular European online beauty retailer, offers free shipping for selected products for promotion, usually for new items of a higher price. The same company currently offers free shipping during December for orders higher than 20 euros, which is a very reasonable minimum amount, encouraging both new and existing shoppers to make the most of their Christmas shopping at their site.
So, such psychology behind free shipping can help you turn your customers into loyal buyers, and we all know loyalty is one of the essential factors in e-commerce.
Can free shipping increase sales?
It’s a fact: free shipping can increase your sales.
For example, when you offer free shipping via order value conditions, you encourage shoppers to purchase more items to reach the free shipping threshold or purchase something that costs more. Either way, it’s a win-win situation. Your shopper will buy more items of their interests or even a bigger or better item they wouldn’t get in the first place. Your business will get a higher profit.
Such psychology behind free shipping benefits everybody.
Another reason free shipping can increase sales is to diminish the possibility of cart abandonment we discussed earlier in this article.
When the shipping costs are too high, customers might decide to exit the whole process of online shopping and go to a physical store to purchase.
And finally, if your e-commerce store offers free shipping and your competition doesn’t, customers will instead shop from you than from your competition, even if they have slightly lower prices.
How do customers react to free shipping?
Free shipping is a tactic that will profoundly influence your shoppers.
Today, in the post-Covid world, with many e-commerce stores open and blooming, customers are starting to expect free shipping.
Let’s dive into some numbers about customers’ reactions to the psychology behind free shipping:
- UPS Pulse of Online Shoppers from 2014 claimed that 80% of shoppers completely ditched their carts if there wasn’t a possibility of free shipping.
- 68% of customers would recommend an e-commerce business with a free shipping threshold to their family and friends.
- A 2016 Marketing Land publication discovered that around 90% of shoppers define free shipping as the main reason to shop online.
FedEx learned that more than 80% of their customers don’t mind waiting a couple of days for their order if the shipping is free. That means you can use cost-saving options, such as your National post, or another cheaper option but a tad slower with deliveries.
Data from UPS also claims that customers are OK with waiting for up to eight days if they don’t have to pay for shipping.
On the other hand, some experienced shoppers tend to get impatient.
So, not only are they willing to pay for shipping, but they will also pay more to get it delivered faster, which will eventually balance your costs of the free shipping threshold. Another win-win situation, wouldn’t you agree?
Free vs. fast shipping
If you still need more data about the psychology behind free shipping, here’s another piece of research. A Deloitte holiday retail survey from 2020 shows that shoppers want free shipping and are only willing to pay minimal amounts for faster options. In summary, 85% of interviewees claimed free shipping is more important, whereas only 15% voted in favor of fast shipping.
If you want to instill a highly-successful shipping strategy, you must take care of both sorts of shoppers.
When selecting a shipping provider, research their reputation and reliability. Unfortunately, if your shoppers have a bad experience with your parcel delivery service, they will also form a negative opinion of your business. Moreover, only promise specific delivery dates to your customers when you have relevant and exact input from the logistic service. Hiccups such as overpromising and under-delivering can destroy relationships with your clients and set your business up for failure.
The psychology of free shipping can quickly fall behind if the deliveries more often fail than not. Nowadays, customers tend to share their negative reviews all over social media, which can harm your reputation even if it’s not your fault. On the other hand, making sure your deliveries are prompt and successful, along with friendly and responsive customer service, can cause positive feedback on social media and raise positive brand awareness.
Either way, you must inform your customers about all the steps of their customer journey, especially about unprecedented situations.
Stand out with our Free Shipping Label
Another great way to use the psychology behind free shipping to your advantage is using our Free Shipping Label.
This WooCommerce extension visually showcases how close your customers are to achieving free shipping. Such visual representation is an additional incentive for your shoppers and motivates them to explore and purchase more of what you offer.
Free Shipping Label comes in Free and Pro versions, and you can try it out for free during our 7-day trial. And what’s best – you get a total satisfaction guarantee, ensuring you a 100% refund of your money if an unsolvable issue prevents you from fully using our plugin.
For additional details or inquiries, explore our FAQs, or feel free to get in touch via our contact form – our team will be more than glad to help you get sorted!
We wish you happy selling!