Should you offer free delivery?

September 22, 2015

The million dollar question for many businesses!

Your customers would love you for it but what would it do to your overheads and how might you manage it? Do you absorb the costs and work on a lower margin? Do you build it into your prices and become less competitive? Do you only offer free delivery over a certain threshold?

It’s a nightmare question and one that many are looking to effectively answer. Whilst no two scenarios are the same, here’s some useful thoughts from a survey that we came across.

Free delivery is a big sales converter

A Compete Online Shopper survey makes for interesting reading. It suggested that free delivery is not only a serious consideration when deciding whether to make a purchase, it can affect the customer’s satisfaction level too. In fact taking the decision to offer free delivery can result in a significant uplift in your sales when you clearly communicate this.

Here are some key findings from the survey:

  • 93% of respondents indicated that free delivery on orders would encourage them to purchase more products online.
  • 2 out of 3 shoppers said they would buy more online if returns were free.
  • When asked about their most recent shopping experience, overall customer satisfaction was 10 percentage points lower for those who paid for delivery compared to those who had experienced a free service
  • High delivery costs were rated as the number one reason why consumers were not satisfied with their online shopping experience
  • 67% of online researchers stated that they purchase items in a store instead of online in order to avoid delivery costs
  • 65% of respondents indicated that they choose the “collect in store” option, when available, for the same reason

Which of the following would encourage you to buy more online?

Free delivery                 93%

Free returns                  67%

In-store returns           60%

In-store pick up           50%

Live chat                       18%

There’s plenty of food for thought in those facts and figures. Maybe it’s time to take another look at your own delivery policy and see if you can makes any changes – it might just give your sales a big boost.

Luke Hodgson

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