{"id":10476,"date":"2020-11-06T10:13:16","date_gmt":"2020-11-06T15:13:16","guid":{"rendered":"https:\/\/www.retailsystem.com\/cz\/?p=10476"},"modified":"2020-11-06T13:31:17","modified_gmt":"2020-11-06T18:31:17","slug":"free-shipping-what-a-can-of-worms","status":"publish","type":"post","link":"https:\/\/www.retailsystem.com\/cz\/blog\/free-shipping-what-a-can-of-worms\/","title":{"rendered":"Free Shipping. What a can of worms."},"content":{"rendered":"

\"FreeAs consumers – we have all seen the tactics \u2013<\/p>\n

\u201cAdd to cart to see final price\u201d<\/em>
\n\u201cCall for price\u201d<\/em>
\n\u201cFlat-rate shipping\u201d<\/em>
\n\u201cEconomy shipping free \u2013 you want it near your house, $$$$)<\/em><\/p>\n

Working with retailers – we often hear, \u201cI\u2019ll just roll it into the price of the product\u201d.<\/em><\/p>\n

Really (to them all)??!<\/p>\n

I remember the days where we could use \u201cFree Shipping<\/em>\u201d as a genuine sales incentive. It brought deals in. Cart abandonment rated dropped. Conversions went up. All the metrics improved and sales \u2013 yep, up.<\/p>\n

Not too long ago I was sitting with the retail owner with 9 stores. He said \u201cJesse, I remember when we would put sales and promotions in Thursday\u2019s paper, and the weekend would bring predictable volume per store based on what we pushed. Absolutely predictable. Every week<\/em>.\u201d Free shipping used to be that equally predictable (within reason). We knew if we offered it on items, we knew the metrics then to apply to calculate the lift in sales volume. We then knew the profitability in that lift, calculated necessary ad spend \u2013 and hit the buttons. Magic.<\/p>\n

Not really \u2013 but it was crazy fun! (Like base jumping – wing suit kinda fun)<\/p>\n

Guess what \u2013 things change. To think any other is the true definition of insanity. Free shipping (then) was not an expectation. Today. 2020 \u2013 it\u2019s a norm reinforced by PRIME consumer conditioning. Free Shipping has become expected; if not expected, at minimum a very compelling (and frequent) disqualifier to you.<\/p>\n

Before we dive in any further, we need to stop; take off the retail professional hat and put on the consumer hat. Hat on firmly (like strong wind firm) – what are your \u201cmotivators\u201d to buy online from one site over another? Product? Absolutely. The coffee table I want. (However \u2013 it\u2019s the same table from the same brand name vendor. Gone are the days of \u201chiding\u201d anything. Vendor image, name, SKU, Dimensions? Yep – it can be found). Availability. Yep. Available. (Actually in-stock matters. Remember PRIME). Price. Yep priced right. It is a bit more \u2013 but that is ok (justified) as this site has a \u201cbetter feel\u201d (covered next). Does the site \u201cfeel\u201d right \u2013 meaning it looks „kept“, feels safe, platform operates as it should, the overall experience was better than others. (If I hit a site and the Copyright says anything than current year, I’m gone. Details matter. That is obvious, and if they are missing that \u2013 what else are they missing?? Like I\u2019ll give them my credit card number).<\/p>\n

Click click click.<\/p>\n

All set. Ok, Check. Add to cart. Wait. Any hidden fees? Shipping? Sales Tax? \u2013 All final variables in in my decision. Submit. I now wait and listen for the drone.<\/p>\n

While I glazed over many fundamentals of the journey \u2013 AS A CONSUMER<\/em> you can all relate. Also \u2013 I must mention the urge to fight the retail professional in us and justify \u201cwe are better\u201d on the abstract. CONSUMER HAT IS ON<\/em>! Don\u2019t justify \u2013 just relate. For now.<\/p>\n

What are the differentiators when all have the same product, comparable price, same web platform (there are only so many), same product imagery, content, catch phrases, whatever? What really matters? Remember (again) fight off the retail professional in you. Fight it! As a consumer what really matters? Product. Absolutely. Availability. Absolutely. Acceptable user experience (all things click click click feel \u201cright\u201d). A must. Price. What else is there? Local proximity \u2013 yes. I believe that is a huge differentiator. Maybe the only one. (Another topic for another day). But to the retailer who views ecommerce as this gold rush vast open prairie \u2013 it is price. There are pass\/fail must haves; and then it is price. Consumer hat on still. Am I wrong? STOP<\/em>. Without question \u2013 Yes; a consumer is willing to pay a bit more as the other experience variables and musts are stack-ranked in one’s risk adversity portfolio“. Same product. Safe, secure site. Click click click is without error \u2013 feels \u201cright\u201d. Product is available. Unless you have brand affinity like Patagonia, Apple, others \u2013 it is price. Very scary. Business model challenging scary.<\/p>\n

Let\u2019s peel back the onion. Free shipping. Certain products (sticking with my coffee table); it is a psychological fact that most shoppers are still more accustomed to the physical store purchase than the online environment. Without question – the bar is moving<\/em>. Guess what – it always has been<\/em>. COVID forced exponential adoption of what is now acceptable in an ecommerce empowered retail world. Just a few years ago \u2013 you think someone would buy a car online? Today I can order it and have it delivered with a 30-day guarantee. But we are \u201cwired\u201d a certain way. Yes \u2013 {insert generation} is more this that and the other, sure. But we are all wired. There is no shipping in-store. Shipping is free. Your brain is just expecting of certain things. Another very importantly aspect – free shipping is key variable in helping us rationalize buying something online and breaking that pattern. \u201cI can have it and it ships free. I can return it. No risk. Click.\u201d<\/p>\n

(OK, retail hat back on) Retailers (you) are faced with the fact that a certain mix of their (your) offerings are products at a price. That is it. It is a fact. The same coffee table from the same vendor from 10 different retailers. Tell me price isn\u2019t it. If you all have it (or can \u201cship it\u201d). Accept it. But there is a win in all this. We figured it out ears ago. Find and focus on ways to increase that cart value. Margins per item are down – get more volume! Upsell. Cross sell. Get on the phone with every customer that buys online. \u201cDid you see the rug that went with that table?\u201d. (Maybe not every order \u2013 maybe?!!!). Focus on LTV of the customer. Future business. Next, find lines where shipping is still palatable in the sales proposition. Special order (hint)\u2026 The model has evolved \u2013 it is still retail!<\/em><\/p>\n

What is the message in all this? I get it \u2013 panic and frustration. But you need to act – and you can. Free Shipping is a fact. You may not be able to offer free shipping on every purchase, but you should make it an option at some order value. Especially make it \u201capples to apples\u201d with the competition. Try new ways. „Add another item to qualify for free shipping“. There are ways. Avoid trickery. Be transparent. Don\u2019t insult with \u201ctiers\u201d that are nothing but your efforts to funnel the consumer to revenue. Look at your competition on product and price. You really think you can bury the shipping? Find that Free Shipping threshold and implement it. Don\u2019t fight consumer behavior expectations. Find ways and conversions will go up.<\/p>\n

Retail on!<\/p>\n","protected":false},"excerpt":{"rendered":"

As consumers – we have all seen the tactics \u2013 \u201cAdd to cart to see final price\u201d \u201cCall for price\u201d \u201cFlat-rate shipping\u201d \u201cEconomy shipping free \u2013 you want it near your house, $$$$) Working with retailers – we often hear,…<\/p>\n","protected":false},"author":3,"featured_media":10477,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[95],"tags":[102],"class_list":["post-10476","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-retail","tag-free-shipping"],"acf":[],"yoast_head":"\nFree Shipping. 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