Free Shipping in eCommerce: Understanding Its Impact on Customers

Businesses are constantly seeking strategies to attract and retain customers and eCommerce brands are no different.? Among these strategies, offering free shipping has emerged as a powerful tool to influence consumer behavior. A survey conducted by UPS found that 88% of consumers are more likely to shop online if they are offered free shipping, while Shippo’s survey of 1,000 consumers found that over two-thirds of consumers said they wouldn’t consider purchasing from a retailer that didn’t offer free shipping. So what exactly does free shipping signify in the mind of the customer, and why does it hold such sway over purchasing decisions?

Perception of Value

According to a survey by Retail Dive, 65% of consumers believe that free shipping is more important than fast shipping. Free shipping taps into a fundamental aspect of consumer psychology: the perception of value. When a customer sees the words "free shipping," it triggers a sense of getting something for nothing, even if the cost of shipping is factored into the product price. Psychologically, it creates a perception of added value, making the offer more enticing than one with an additional shipping fee.

Overcoming Cart Abandonment

One of the biggest challenges for eCommerce businesses is reducing cart abandonment rates. Studies show that unexpected shipping costs are a leading cause of cart abandonment, with around 60-80% of online shoppers abandoning their carts due to high shipping fees. Further studies show a significant majority of online shoppers (often around 80-90%) expect free shipping to be offered, and many of them are willing to wait longer for delivery if it means they don't have to pay for shipping. By offering free shipping, businesses remove this obstacle and provide customers with one less reason to reconsider their purchase. It streamlines the checkout process, leading to higher conversion rates and increased sales.

Psychological Pricing Strategies

Free shipping can also be leveraged as part of psychological pricing strategies. In a study conducted by Nielsen, 93% of consumers said they are more likely to add more items to their cart to qualify for free shipping. For example, setting a minimum order value to qualify for free shipping encourages customers to spend more to reach that threshold. This tactic not only increases the average order value but also enhances the perceived value of the purchase. Customers may choose to add more items to their cart to "unlock" the free shipping offer, even if they initially intended to buy only one item.

Building Trust and Loyalty

In addition to its immediate impact on sales, free shipping plays a crucial role in building trust and fostering customer loyalty. A survey by Deloitte revealed that 62% of consumers are more likely to shop with retailers who offer free shipping, indicating a correlation between free shipping and customer loyalty. When businesses consistently offer free shipping, it creates a positive association with their brand. Customers feel valued and appreciated, which strengthens their loyalty over time. Moreover, in an era where online reviews and word-of-mouth recommendations hold significant sway, satisfied customers are more likely to advocate for brands that provide a seamless and cost-effective shopping experience.

Competitive Advantage

As the eCommerce space becomes increasingly saturated, standing out from the competition is essential for success. Adobe reported that 73% of consumers surveyed said that free shipping significantly influences their decision to shop online from one retailer over another. Offering free shipping can serve as a potent differentiator, especially in markets where it's not yet the norm. Businesses that prioritize customer convenience and transparency in pricing gain a competitive edge, attracting shoppers who prioritize affordability and a hassle-free shopping experience.

A survey conducted by UPS found that 88% of consumers are more likely to shop online if they are offered free shipping.

In the minds of eCommerce customers, free shipping represents more than just a cost-saving opportunity. It's a powerful psychological trigger that influences purchasing decisions, reduces friction in the buying process, and fosters trust and loyalty towards brands. By understanding the psychology behind free shipping, eCommerce businesses can harness its impact to drive sales, enhance customer satisfaction, and strengthen their competitive position in the market.

Looking for more eCommerce insights? Visit our blog.

Want to speak with experts about decreasing cart abandonment for your business? Contact our team.