Pre-empting the craze for free holiday shipping

The importance of free shipping promotions for the upcoming holiday season can’t be overstated, as new data from measurement firm comScore demonstrates. While merchants are well aware that free shipping is shoppers’ top-sought discount, it’s still impressive to see just how thoroughly the availability of free shipping — or lack thereof — affects purchase outcomes. To begin with, fully 51% of eCommerce transactions in the second quarter of this year involved free shipping — and the holiday season will likely see that percentage surge even higher.

Additionally, two of the top five reasons for abandoning carts are directly related to free shipping: 48% of comScore survey respondents who’ve abandoned carts said they did so because no free shipping was offered, while 45% said purchases stalled when their orders failed to qualify for the free shipping threshold.

Some larger mass merchants have responded to consumers’ demand for free shipping by lowering or even eliminating altogether the threshold for qualifying for the discount. For most merchants, though, the cost of offering free shipping across the board is too great of a burden to bear.

The good news is that consumers are willing to consider alternate routes to free shipping. And with six weeks still to go in the third quarter, merchants have time to promote these services in an attempt to pre-empt the mad rush for free shipping discounts once the peak holiday buying period begins. Consider these strategies:

Showcase the shipping benefits of loyalty club membership. Nearly half of all consumers have signed up for a retailer rewards or loyalty program, according to the comScore report, and 10% have committed to a paid membership that delivers an array of perks, with free shipping usually chief among them. Additionally, more than one in five consumers say they would consider paying for such a program — suggesting there’s an opportunity for merchants to devise and market meaningful incentives for their target audience.

As discussed in a previous post, blanket free shipping needn’t be the default for rewards club members. But the perception that free shipping is just as available without membership is a key reason consumers avoid loyalty programs, according to the comScore study: 42% of those who wouldn’t pay to join a rewards club say they can get free shipping anyway. So merchants should ensure that club members get the best possible shipping deal at all times — and that may well include holiday free shipping or free upgrades to expedited delivery. And they should explicitly and prominently highlight those shipping benefits in their loyalty club promotions, so shoppers know members get access to discounts found nowhere else.

Road Runner Sports promotes its VIP program with global banners on the eCommerce site and a dedicated page on Facebook, along with a YouTube video that promotes “free shipping every day” and “warp speed” expedited order fulfillment offered to members.

Highlight free site-to-store options. More than half of all consumers have used “ship-to-store” services when shopping online, and 38% report selecting that option because it’s free, comScore found. Merchants who have physical store outlets and offer site-to-store services should therefore highlight availability as the holiday season approaches, letting shoppers know they have an alternative to shipping fees.

Ace Hardware promotes its free store delivery service in a global banner, then reiterates the message on product pages. Shoppers checking availability can view whether an item is currently in-stock or, if not, how long delivery to the local store will take.

Reach out to cart abandoners. Since the lack of free shipping and the inability to reach a free shipping threshold are top reasons for cart abandonment, merchants should reconnect with these would-be customers and entice them back to the site with ways to save. Rather than automatically offering a free shipping discount for order completion, though — which might “train” users to abandon carts — merchants should consider alternative messaging, such as:

• sending an abandoned cart reminder displaying the items left behind, along with complementary items that would bring the order total to above the free shipping threshold.

• triggering a message to recent cart abandoners the next time a site-wide free shipping offer is, indeed, in effect.

• promoting free site-to-store delivery services.

• offering an alternate discount or a gift with purchase.

MarketLive merchant Totes/Isotoner follows up with cart abandoners via  a series of emails, the last of which offers a 10% discount for order completion.

How are you gearing up for the onslaught of free-shipping-seekers this holiday season?