Free Shipping: Facts, Trade-offs and Alternatives
Updated · Dec 24, 2008
Regardless of what shipping strategy you’ve adopted for the holiday shopping season, shipping remains a complicated and controversial topic year-round for e-commerce businesses because offering free shipping means both reaping benefits and managing drawbacks. Here we provide an overview of the debate over shipping discounts as well as some tips for alternatives to free shipping.
If you look at the statistics, it would seem that the free shipping debate has all but been decided for online retailers. In a 2008 survey conducted by PayPal and comScore, 43 percent of shoppers said they abandon their shopping carts because of unexpectedly high shipping charges. Forrester Research reports that 61 percent of online shoppers prefer to shop with a retailer that offers free shipping than one that doesn’t.
Clearly, free shipping can clinch the deal for some consumers on some products. However, many retailers feel that blanket free shipping offers are corrosive to their profit margins. Indeed, many would have a hard time staying profitable if they offered free shipping across the board.