Attracting and retaining customers is crucial for any eCommerce business, especially in a crowded online marketplace. To stand out and drive sales, many businesses use free shipping as a marketing strategy.
Let's start by looking at some compelling statistics:
- 66% of shoppers anticipate receiving free shipping on all their online purchase.
- 61% of consumers are inclined to cancel their purchase. if free shipping is not provided.
- Businesses that offer free shipping experience a 20% increase in conversion rate compared to those that do not provide this option.
With these numbers in mind, you should consider offering free shipping for your customers.
In this blog post, we will explore the benefits of free shipping, and how to implement it on your Shopify store to increase your conversions. Let’s dive in!
Why offer free shipping?
Offering free shipping can encourage customers to make purchases by reducing the overall cost of the transaction, which can improve sales, boost average order volume, and gain a competitive advantage.
Increase sales
To enhance sales conversions, it is essential to address the issue of shopping cart abandonment due to shipping fees. When free shipping is offered, 73% of shoppers are more likely to purchase items online.
Despite investing a lot of money in marketing efforts to drive traffic to their eCommerce store, businesses can lose customers due to shipping charges. Conversions are crucial to an eCommerce store's success, and providing free delivery is a reliable method of raising the conversion rate.
Increase average order value (AOV)
A part of the expected surge in eCommerce revenue, prompted by free shipping, is predicted to arise from an increase in the average order value. Certain customers may add extra items to their shopping carts when free delivery is conditional upon a minimum purchase amount, such as $25, $50, or $75.
As per a study, 94% of consumers have taken some type of action to qualify for free shipping. And did you know that by providing free shipping, NuFace, a well-known online cosmetic store, was able to boost its average order value by an impressive 7.32%.
Gain a competitive advantage
By offering free delivery when your rivals don't, you can draw new clients away from your competition. Since 90% of consumers view free shipping as their primary incentive that encourages them to shop more frequently online, providing this offer is a significant distinguishing factor that can help you build a more extensive customer base.
How to offer free shipping on Shopify to boost revenue
You might have heard the saying that there's no such thing as a free lunch, and the same goes for free shipping. Although it might be marketed as a benefit for customers, someone ultimately has to bear the cost, and in most cases, that will be you, the business owner.
So let’s follow our tips to do free shipping that supports both your buyers and your bottom line.
Promote free shipping on your Shopify store
A great method to attract visitors to your Shopify store is to provide free shipping. However, more than simply providing the offer is required. You should make it noticeable so visitors are aware of it.
For example, you can promote it by using an Announcement Bar. This feature enables you to create a banner or pop-up at the top of your website, instantly notifying customers of your offer upon visiting your site.
Dreamplants provides free shipping for orders exceeding $150 and advertises this promotion through an announcement bar that is displayed at the top of all pages. The store design of Dreamplants is enhanced by Foxify app, developed by FoxEcom.
Provide free shipping for selected products
Do you have any specific product in your inventory that isn't selling as well as others?
It can be frustrating, especially when it's a high-priced item. But you can offer free shipping on them or a combination of products to clear them off your shelf quickly and reduce your inventory.
Another way is to use free delivery as a promotional tool for products that benefit your business the most. In other words, prioritize products with a higher profit margin.
Select regions or shipping zones for free shipping offer
While it's a laudable aim to provide free delivery for all customers, there may be other options. For international businesses, offering free shipping in specific countries or regions is worth it.
How can you determine which regions or countries to offer free shipping to?
One approach is to consider people's purchasing habits, which can vary from one location to another. A free shipping promotion may yield a higher return on investment (ROI) in some areas than others. Therefore, it's essential to conduct research or use tools like Google Analytics to identify the regions/ countries where most of your customers come from before introducing free delivery to those areas.
You can learn more about how to track conversions with Google Analytics 4.
Another strategy is to consider the shipping destination. For instance, if your shipping is based in California, shipping to Shanghai will likely incur a higher shipping fee than delivering to Los Angeles. In this case, you can offer a free shipping rate for shipping zones with lower shipping costs.
Source: Spanx
Set minimum order value for free shipping
One great way to boost your sales is to offer free shipping with a minimum order value. It acts as a threshold that helps you protect profit margins while still providing the offer.
Source: Puma
With this strategy, customers may be incentivized to purchase additional items to reach the minimum order value. BigCommerce found that 84% of consumers have added an item to their cart just to meet a minimum order limit for free shipping. Therefore, this strategy can increase your average order value (AOV) and overall revenue.
To successfully apply a threshold, you need to do it right with some careful calculations to find an optimal balance. The threshold should be reasonable. It has to hit the sweet spot, where it protects your profit margins while also incentivizing online shoppers to increase their purchase amount. Learn more about how to calculate your free shipping threshold here.
Create free shipping with a membership program
You can make free shipping an exclusive advantage solely for customers who sign up for your Shopify store's membership program.
Regarding this strategy, Amazon is likely the first name that comes to your mind. Who doesn’t know about their renowned Amazon Prime membership program, which provides free delivery to members?
Source: Amazon
The program provides its members with various benefits, such as fast and free delivery, access to streaming of movies, TV shows, and music, unlimited photo storage, early access to lightning deals, and exclusive discounts on various products. Members then pay monthly or annual fees to take advantage of these benefits. A whopping 78% of Amazon Prime members joined the program due to the free shipping perk. That's an impressive number!
This approach can help you cover the cost of free shipping, entice more customers to join your membership program, and increase customer loyalty.
Offer alternative delivery options
While free shipping is great, it doesn't have to come with lightning-fast delivery. Instead, consider providing an express shipping option for those who just can't wait to receive their products.
Give your customers the ultimate shipping flexibility by offering at least two options to choose from. For example, one option can be free and with regular speed, 3-8 days, while the other can be faster, 1-2 days, for a fee (express shipping). This empowers your customers to decide what's more important, speedy delivery or lower costs, and lets them tailor their shopping experience to their needs.
You demonstrate your brand's thoughtfulness and generosity by offering multiple shipping options, putting the power of choice in your customers' hands.
Create a limited-time free shipping offer
Sometimes, you offer a 20% off coupon that expires within an hour or a weekend sale. Discounts are great, but free shipping can be just as enticing. If you're worried about its impact on your profit margins, you don't have to offer it year-round. Instead, consider using it strategically for special events like holiday sales or your store's anniversary. You could tie it in with seasonal events that are relevant to your industry.
And mark your calendar now for the two most significant shopping events: Black Friday and Cyber Monday. Did you know that 130 million people shopped online during BFCM in 2022? So take advantage of the opportunity to capitalize on the holiday shopping frenzy and boost your sales.
How to set up free shipping on Shopify
1. Set up free shipping as a default shipping rate
With Shopify, you can make free shipping your default shipping rate for all orders. Moreover, you can also add different paid shipping rates for specific products or orders that exceed certain values.
Step 1: Log in to your Shopify admin panel and go to the Settings tab on the left corner.
Step 2: Click on the section Shipping and Delivery, then select Manage next to the shipping profile.
Step 3: From Shipping Zones, click on Create Zone.
With this option, you can create one specific zone (country) or multiple zones for offering free shipping.
For example, you want to offer free shipping in Australia only, so enter the Zone Name: “Australia”, then click on Australia from the drop-down -> Click Done. You can also click Add more countries/regions in Markets for locations that are not available from the drop-down list.
Now you can see Australia in your shopping zones.
Similarly, if you want to offer free shipping in many countries such as Finland, France, and Germany, you can enter the Zone Name: Europe -> Click all the countries above from the drop-down -> Click Done.
Step 4: For each shipping zone that you want to offer free shipping:
- Click Add Rate
- Enter the name for the rate. You should consider the name carefully because customers can see it on the checkout page.
- Keep the Price $0.00.
- Now, click the Done and Save buttons, respectively, to finish setting up your free shipping for the selected shipping zone.
2. Free shipping with a minimum order value
If you want to provide free shipping for orders above a specific value, such as 75 EUR or 100 USD, you'll need to include a condition based on price in your free shipping rate.
You can follow these steps to set up free shipping with a minimum order value:
- Step 1: Go to Shopify admin panel > Settings.
- Step 2: Select Shipping and Delivery -> Click Manage in the General shipping rates section.
- Step 3: Click Add rate for whichever shipping zone you want to create this free shipping offer.
- Step 4: Click Set up your own rates, enter the name for the rate, and keep the price at $0.00 only.
- Step 5: Click Add conditions > Select Based on order price. For example, you want to provide free shipping for orders over $100, so enter Minimum price as $100 and enter Maximum price as No limit.
- Step 6: Click Done and Save to finish the setting.
3. Free shipping for select products
It is possible to include a free shipping rate for specific products. To do so, you need to create a custom shipping profile that specifies the products eligible for free shipping offers.
Step 1: Create a custom shipping profile
- Go to Shopify Admin -> Settings -> Shipping and Delivery
- From the Custom shipping rates section, click Create new profile.
- Give your profile a name.
- Click Add products in the Products section, and then add products to the shipping profile.
Step 2: Once again, follow the same steps mentioned earlier to:
- Create a zone in the Shipping zones section.
- Click Add rate for whichever shipping zone you want to create this free shipping offer.
Step 3: Click Save to finish the setting.
Wrapping up
With online shopping becoming increasingly prevalent, standing out from the crowd is a challenging feat. However, offering free shipping lets you set your Shopify store apart from the rest. Not only does it encourage your customers to keep buying from your Shopify store, but it also allows you to build trust and foster a deeper connection with them.
In this article, we’ve shared some helpful strategies to help you implement free shipping for your Shopify store while driving conversion rates and customer loyalty. So why wait? Put these tips into action and watch your sales skyrocket in no time!
