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How Postage Costs Affect Shopping Basket Abandonment

11 May 2015 by Genie Lab

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68% of all shopping baskets end in abandonment. That’s a stat from the Baymard Insitute that strikes fear into the heart of Ecommerce bosses everywhere. BI Intelligence anticipates that $4 trillion of sales is left abandoned in shopping baskets every year.

The biggest contributor towards that fearsome statistic is shipping. Delivery costs are the primary reason that consumers don’t complete an order online.

Why are users turned off by postage costs? 

  1. They’re unexpected 

    Many websites don’t stipulate specific delivery costs until products have been added to a shopping basket.

    That means that customers are less likely to buy a product because it costs more than initially thought. A study by Etsy, in which it hid shipping costs until checkout for specific sellers, proved this. Although hiding delivery fees did increase the amount of products being added to shopping carts, a corresponding number also failed to complete the transaction. 

    Overall, conversions weren’t affected – proving that hidden delivery fees won’t increase sales, they’ll just annoy your customers. 

  2. They’re too expensive

    Even if a user did anticipate shipping costs, many will still cancel the purchase because they deem postage to be too pricey. 

    When shipping isn’t included at a product page, many users will simply add a product to basket just to see the cost and compare against your competitors. However, this process simply adds more barriers to conversion at your checkout and increases the chance of users going elsewhere and never coming back. 

  3. Shoppers love the word ‘free’

    It’s an open secret that ‘FREE’ is the world’s best marketing tool. People love being given things for free – even when it doesn’t necessarily represent a better deal.

    Although it can cut into profit margins, and so potentially necessitate slightly higher product prices, free delivery simplifies the purchasing process and improves conversions. 

    Notice how the high-end sofa seller Couch utilises free delivery messaging to convey trust – putting the user at ease. What they see is what they get.

How to use delivery to reduce your cart abandonment 

  1. Be clear with your messaging

    Want to take delivery prices out of the abandonment equation? Then be abundantly clear about your delivery information. Include shipping prices on your sidebars, link clearly to delivery information or display postage details clearly on product pages. 

    The more upfront that you can be about your delivery costs, the less likely your customers will bail at checkout. 

  2. Use flat rates

    Similarly, if you can use consistent pricing, you’ll eliminate surprise from the purchasing process. Flat rates, so long as they’re used in conjunction with clear messaging, put users at ease. 

  3. Go free delivery

    We've already established how free postage is the holy grail of Ecommerce. 47% of all of the internet’s orders include free shipping, while shoppers are known to spend 30% more if they can get their order delivered free of charge. If you find it’s uneconomical to offer free delivery across the board, consider introducing free delivery with a ‘catch’. That could be:
  • Free delivery to members or premium subscribers – to reward return visitors and gather consumer information 

  • Special ‘free delivery days’ – to evoke excitement and generate sales in potentially quiet periods or to inform advertising campaigns

  • Free delivery to physical stores – to grow footfall in stores and boost cash sales

  • Free delivery with minimum orders – 39% of customers said that they’ll purchase more in order to obtain free delivery on an order. Consider offering free delivery at a sum that’s 10% higher than your average order value

Whatever you do, test it

No online store is the same and each set of customers will behave differently. What’s important is to test how your users react to different delivery strategies. Employ A/B testing to see if users react to different free delivery promotions, or to see if strict pricing strategies work better than flexible postage.

What do you think?

How do you approach the problem of postage? Do you offer free delivery? Is it cost effective? Let us know below or talk to us on Facebook and Twitter.

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