Should You Be Offering Free Shipping Online?

A new study by UPS reveals how shipping costs affect consumer behavior

Shipping costs—or lack thereof—can be a powerful tool for retailers striving to create alluring shopping opportunities online.

In UPS’ new Pulse of the Online Shopper report, 81 percent of respondents ranked “product price” as the most important factor in making an online purchase. Shipping costs, however, came in at a close second, with 75 percent of those polled rating it as “very important” in their purchase decision-making.

The study also revealed that many shoppers are willing to work for their free shipping. Fifty-two percent of those polled said they’re open to adding items to their virtual cart to reach a free-shipping price threshold. Conversely, 45 percent said they have abandoned a cart when they don’t qualify for free shipping.

A majority (57 percent) also said their decisions to pay for shipping are predicated on the total cost of a purchase—that “the decision to pay for shipping is most often driven by the total cost of the order where they have a clear sense of what it’s worth.” And most of those polled said they will pay for shipping when they “absolutely need something.”

Courtesy UPS

More findings:

  • 56 percent said they have abandoned a cart when shipping costs made the total purchase cost more than expected.
  • 45 percent have abandoned a cart when the order value didn’t qualify for free shipping.
  • 52 percent have added items to their cart with the intention of keeping them to qualify for free shipping.
  • 57 percent decided to pay for shipping when the total was still considered a good bargain.
  • 54 percent are likely to take advantage of an email offer for free shipping.
  • 44 percent have searched online for a free shipping promo code
  • Reasons to decide to pay for shipping online included “free shipping not offered” (60 percent); “total cost was a bargain” (57 percent); “I needed item faster than free-shipping service offered” (30 percent); “not enough items in cart to meet threshold” (29 percent); “product discount exceeded cost of shipping” (29 percent). 
  • 4 in 10 shoppers expect a ship-to-store option to be available. 
  • 29 percent will actually choose to shop at the store instead of online just to avoid shipping costs.
  • 33 percent find curbside pickups and returns appealing.
  • 45 percent have returned an item that was purchased online in the past year.
  • 61 percent of shoppers who have returned an item in the past year prefer to return items in store, and 39 percent prefer to ship back to the retailer.

The study concluded that retailers may want to offer free or deeply discounted shipping to shoppers at various times of the year, using it as a true sale-style perk instead of a mainstay of the business. 
















JCK Magazine Editor