It’s been well-proven that consumers generally don’t mind shelling out a little extra cash in the name of convenience. But when it comes to online shopping and the ease of having goods show up at one’s doorsteps with the click of a button — for consumers, the buck seems to stop with paid shipping.
This isn’t groundbreaking intel on the consumer side: The memes about shoppers abandoning online orders after landing on the “shipping” page and learning of the costs are plentiful.
But new research shows retailers are continuously missing the memo because they’ve either failed to sufficiently analyze consumer trends or, due to budget constraints, simply can’t afford to offer free or cheap shipping.
A study released this week by BigCommerce, an e-commerce SaaS platform for brands, found that despite the reciprocal relationship between e-commerce and shipping, the latter is often an afterthought for online retailers. Meanwhile, for customers, a brand’s shipping experience can be just as important as its product and marketing, the researchers noted.
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In fact, 77% of those surveyed by the company indicated that they abandoned an online purchase due to unsatisfactory shipping options, while 58% said they stopped shopping with particular retailers altogether as a result of a negative shipping experience.
BigCommerce, which surveyed around 3,000 digital consumers and 800 online merchants to analyze the role shipping plays in the consumer purchase journey, further found that during the past 12 months, 84% of respondents made a purchase from an online retailer specifically because it offered free shipping. Meanwhile, half of respondents said they avoid shopping with retailers that force customer to pay for shipping.
Still, the study suggests there could be opportunities for retailers to boost their topline by leveraging order minimums — even if they are unable to make shipping completely free for all levels of purchase.
“Free shipping can make online shoppers feel like they’re getting a deal — even if it means spending more to get it,” the researchers noted, adding that, in the last 12 months, 84% of consumers have added items to their cart in order to receive free shipping.
The trend seems to be particularly pervasive among younger shoppers with nearly 90% of millennials and 85% of Generation Z consumers indicating they have added items to their cart solely to hit a minimum order threshold for free shipping.
While the verdict is fairly obvious, many smaller, independent firms struggle to offer free (or cheap) and convenient shipping options that can compete with Amazon, which has repeatedly set new consumer expectations for fast and free deliveries. Nevertheless, companies like UPS have launched new services and programs to help the “little guy” get ahead. For example, the global shipping company in May rolled out several promotions and discounts targeted at small businesses as part of its participation in National Small Business Week. These programs include offering small businesses free access to UPS Smart Pickup, a service that automates the pickup request for online orders; discounted prices on ground, air and international shipping; and the elimination of weekly service fees.
Still, if merchants are going to address customer demands for better shipping, they first have to recognize that these rising expectations exist. According to BigCommerce, there’s “very little” merchant recognition of shipping’s impact on sales. Specifically, 47% percent of merchants who participated in the study were unaware of their online cart abandonment rate as well as the percentage of cart abandonment caused by shipping options. Additionally, the survey found that only 13% offer free shipping on all purchases, while 39% give consumers free shipping on purchases over a designated minimum purchase amount.