Free Shipping, Free Returns Critical for Online Shoppers

Online shoppers want free shipping, free returns, on-time delivery, and accuracy. Internet retailers that deliver on these consumer desires may earn loyal customers and gain a competitive advantage.

Order fulfillment — the act of packing products, choosing a carrier, and shipping an order — and online returns are two of the most challenging tasks retail ecommerce businesses face. Simply put, shipping and returns are difficult and expensive.

But shipments and returns also represent a customer service opportunity. Businesses that can meet or exceed expectations in these areas may be able to get more new customers and establish more long-lasting relationships that lead to repeat sales. And a shopper that returns three or more times to make a purchase is perhaps five times as valuable on each order to an online merchant than a single-visit shopper — and much more valuable for the lifetime of the shopping relationship.

Free Returns

A 2016 consumer survey from Shippo, a shipping application-programming-interface firm, found that 87 percent of respondents believed that free returns were an important part of their ecommerce buying decision.

Free returns are important to 87 percent — 53 percent plus 34 percent — of survey respondents. Source: Shippo.

What more, about 34 percent of those surveyed in the “2016 eCommerce State of Shipping” report said that they would only purchase from an online retailer if they knew they could return their order without having to pay for return shipping.

If Shippo’s data can be applied to ecommerce consumers generally, then something like one in three shoppers won’t buy from your store if it doesn’t offer free return or exchange shipping.

Given that many online retail businesses report return rates of three percent or less, offering an open and free return and exchange policy may lead to more sales and, possibly, even more repeat business without adding significant risk.

Free Shipping

Nothing makes a shopper abandon a cart or price-check a product on a competitive site more quickly than expensive shipping.

And more than one report or survey has found that free shipping is a significant buying incentive for online shoppers.

As an example, the aforementioned Shippo report found that about 63 percent of respondents would choose one online store over another for a free shipping offer and about 34 percent would only buy online if shipping was free. Thus, a free-shipping offer positively influenced about 97 percent of the consumers that Shippo asked.

Similarly, a Walker Sands Communications’ survey of about 1,400 consumers found that free shipping continues to be the most powerful incentive an online store can offer, with about 88 percent of those surveyed stating that free shipping impacted their decision to buy from a particular online store. This is up from about 80 percent just two years ago.

In a 2016 survey from Walker Sands Communications, 88 percent of respondents said that free shipping was an important online buying incentive.

While not every Internet merchant can offer free shipping on every item, merchants that make some form of free shipping offer are meeting shopper expectations and may have a competitive advantage over stores that charge for shipping.

On-time Delivery

Sometimes, to offer free or low-cost shipping, online stores must use relatively slow shipping services. While shoppers seem to understand that free shipping won’t necessarily be as fast as paid shipping services, those shoppers still expect on-time delivery.

If a retailer’s site estimates that an order will take about five days to arrive, shoppers fully expect that shipment to arrive in five days or less. Anything longer is a service failure.

A recent survey from Voxware, a cloud-based communications provider, of about 500 shoppers found that 45 percent of those surveyed would be less likely or much less likely to buy from a particular retailer if the retailer missed its promised delivery date during the holiday season.

Effectively, shoppers expect online merchants to keep their shipping promises. When a store provides an estimated delivery date, that store needs to ensure that the order arrives on time.

Build a reputation for on-time delivery, and your store is also building trust.

Package Accuracy

Not surprisingly, online shoppers also expect merchants to send the proper products in each package. If you order an extra-large, red widget, you expect to get an extra-large, red widget.

Something like 35.4 percent of shoppers will never return to a merchant if that merchant makes just one packaging error, according to the Voxware survey. If a store stuffs the wrong item in the box three times or more, 91.8 percent of shoppers will never shop with that store again.

Online stores that use product checklists and detailed packing workflows may be able to avoid significant losses and thereby gain a competitive advantage if they are careful with picking and packing orders.

Order Fulfillment, Returns Matter

Your customers are very concerned about shipping — delivering a product to them and facilitating a return or exchange.

Taking care to meet or exceed shopper expectations around free shipping, free returns, on-time delivery, and packing accuracy may help your retail ecommerce business acquire and keep customers.