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E-Commerce Incentives: It’s All About the Shipping

E-Commerce Incentives: It’s All About the Shipping

E-commerce shoppers often have to be encouraged to buy. While customers who visit your physical location most likely do so with the intent of making a purchase or looking into a future purchase, the majority of ecommerce sites report that their conversion rates are between just 1% and 5%. Customers can easily browse online, doing real-time price comparisons to help make their purchase decisions. Browsing on its own, with no intention of buying now or in the future, has become a form entertainment – think window shopping, but much more convenient. It takes a little nudging to convince these users to take the plunge and purchase… but not as much as you might think!

[Tweet “54% of online shoppers cited higher than expected shipping costs as the reason for cart abandonment”]

As an online shopper, I must admit, coupon codes, flash sales and other kinds of discounts are enticing. However, if I get to check out and the shipping is high in relation to my total spend, I’ll quickly click away without authorizing my purchase. And I’m not alone – 54% of online shoppers cited higher than expected shipping costs as the reason for cart abandonment and 44% have abandoned carts because they didn’t qualify for free shipping.

On the other hand, free shipping is included in 47% of all online purchases. What’s more, when free shipping is offered, customers spend 30% more per order. Thus, not only does free shipping lead to more conversions, but it can increase revenue overall.

2 Important Considerations

It’s clear that free shipping is a viable incentive to boost e-commerce conversions. However, there are 3 important considerations to make before you decide to follow through with this offer.

  • Margins:

    If an item is priced at $6, you spent $3 making it and it’s going to cost $4 to ship, it doesn’t really make sense to offer free shipping. If you’ve ever used Amazon Prime, you’ve noticed that items like this are often not eligible for free shipping or cannot be purchased and shipped on their own via Amazon Prime. You can follow this same strategy for your business, setting a minimum purchase quantity or spend (i.e. Free Shipping on Orders $35 or more).

  • Expectations:

    That being said, if customers are expecting free shipping without any stipulations, they are more likely to abandon their carts if they see that they don’t qualify. To combat this issue, take control in setting their expectations. Clearly state the threshold for free shipping in a prominent area of the site – like the header – as well as on your product pages. Not only will this set a realistic expectation, it will also encourage customers who may have only planned on spending $20 to add $15 worth of goods to their cart in order to receive free shipping.

Free shipping is by no means the only incentive used to increase conversions, but it has proven to be a highly effective one – and sacrificing the $8 shipping fee on a $100 order is a much smaller hit to your bottom line than a 20% discount on the same order!

Need help optimizing your e-commerce strategy for 2015? Reach out to us! We’ll perform an audit of your website and overall digital presence and help you create a unique approach to increase conversions and boost your bottom line!

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Creative Director/Senior Designer

Tom DiGrazia

With over a decade and a half of professional design experience, Tom brings his knowledge of design principles and focus on user experience to every aspect of his contribution to TTG. Paying special attention to each client’s brand, personalized needs and individual interests, he strives to create compelling concepts utilizing intuitive and highly-refined design solutions. In addition to traditional and digital design work and oversight at TTG, Tom also boasts a wide portfolio of web development projects with the company, allowing him to stretch his CSS and HTML skills across multiple platforms and disciplines. He feels that being a designer in the digital landscape of websites, eCommerce solutions, email marketing platforms and social media, it is important to understand the code that goes into these areas as it assists his ability to tailor designs specifically targeted to achieve the best end result and further builds understanding and communication with backend development teams.

In his off hours, Tom is an avid pop culture enthusiast, staying up to date on the latest shows, films, comics and games. He can also typically be found taking part in a whole host of artistic activities that help him further stretch his creative legs. Regardless of the activity, Tom is always accompanied by his dog, Eli, and his cat, Tib.

Design, Photography, Illustration, Digital Imagery Manipulation, Wesbite Development

Photoshop, Illustrator, InDesign, Lightroom, HTML/CSS, Wordpress


Courtney Dumont

As Senior Marketing Strategist & Analyst at Technology Therapy Group, Courtney is energized by the ability to flex both her left and right brain daily. Courtney discovered her passion for Marketing at Bryant University, where she spearheaded research on students’ perceptions of Social Media Marketing for her Honors Capstone Project. After graduating Bryant in 2012, she joined the Technology Therapy team, where she’s honed her skills in social media, search and social advertising, email marketing, SEO, and more.

Since joining the team, Courtney has created digital marketing strategies and managed campaigns for clients across the country, ranging from plastic surgery centers, to jewelry stores, to construction companies. With a cohesive, cross-channel approach and a focus on data-driven decision making, she has increased their leads by up to 217%. But Courtney doesn’t leave her zeal for social media at the office; she also runs a local foodie Instagram account with her husband to document their meals across Rhode Island and beyond. Check them out: @hoppilyfed.

Marketing Strategy, Data Analysis, Google Ads, Facebook Ads, Social Media

Google Analytics, Google Ads, Facebook Ads, Facebook Creator Studio, Instagram, Klaviyo, Mailchimp, Emma Mail, Google Data Studio, WordPress, YouTube, LinkedIn, Facebook, Microsoft Office