Free shipping is becoming a must strategy for those who want to thrive on online shopping. Many customers now expect to have those fees waived so they can purchase something from a particular website. In fact survey suggests that a merchant increase sales chance by 65% when customers do not have to pay for shipping charges.
But as most us are aware, “there is no free lunch”.
As retailers know, it is expensive to ship a parcel from One Point to the other. And for many different reasons, shipping carrier rates are increasing over time. What this means is: Someone must pay for those shipping costs.
It’s well documented that if we provide a free service, this influences heavily on consumer behavior because clients have a perception that they are getting an amazing deal. There are many examples about this: Free Checked Bags when flying, Free coffee refills in Restaurants, Free samples in grocery stores…
So nowadays we see many merchants selling their goods with shipping fees included at the transaction. 90% of online shoppers view free shipping as a major incentive to opt-in purchasing online, while 86% of abandoned carts happen because of shipping costs related to the order.
But remember, there is no free lunch…so the truth is: these savings are typically hidden somewhere else.
In order to apply the free shipping strategy, a business has to find the right balance of driving more conversions and keeping operations profitable.
Playing the free shipping game means finding the right balance of driving more conversions and not breaking the bank. So, what options do small to mid-sized online retailers have?
Those are the few options we often suggest our partners:
a) Insert the shipping cost into your price
This is Free Shipping 101. Raise your price to accommodate the shipping cost so you can provide the shipping for free.
The key is to find the perfect balance of rising the prices of your products to the point that you can provide Free Shipping and not lose sales due to cost of the product.
b) MOQ- Minimum Order Requirement
You can make the client spend a certain minimum amount of dollars to activate free Shipping. This works wonders because shipping more products in one box will save you tons of logistics costs that you can pass it on to the customer as free shipping.
Remember that the idea is to make the customer know he is getting a great deal, so making him put one extra thing or two in the cart works really well. By the way, 93% of customers will take action to qualify for free shipping!
c) Keep an eye on your margins
There is no point on getting into a transaction if you lose money after it is done right? So even though you want to increase the amount of sales by offering free shipping, you should only do it if you can actually afford it.
Normally there is a small unwritten rule on ecommerce shipping: Things that are cheap, are hard to be shipped for free. Imagine a key that you sell for $8 and the shipping cost is $8. When the transaction is done, you won’t make any money.
Your margins are different for each of your products, but make sure they do have a comfortable sales price that can offset the product cost itself so you can keep some of the margin.
To be a successful ecommerce store you should try to go with the Free Shipping Strategy ASAP. Numbers are favoring those who make it successfully. There is not a simple solution that is suitable for all the online players, but they must be able to find the balance between sales volume, profitability and expenses.
Ingols Digital helped a company in Vancouver to do this well. Vancouver Best Cookies was transformed from a simple bakery to a master in delivering yummy cookies for free while being profitable!
Worth checking it out!
Before sharing my story, I wanted to make a quick disclaimer.
This, by all means, have nothing to do with how I judge or see stereotypes (good or bad) of the world… However, I just wanted to point out that analyzing the particulars of a specific region might help us understand some behaviors, and why not, stereotypes of particular areas of the world.
Let's talk about Canada, for instance. This country is fascinating because it was basically founded on English and French customs and principles. When we study these two European countries, we realize they are so different from one another that they have a history of battling one another. And yet, Canada is, by many different standards, an inclusive society that cherishes differences!
The French are mainly located in Quebec and New Brunswick. In contrast, the English are in all the other provinces in its majority.
Go to Montreal, most of the people will speak French with you. At a restaurant, most of the menus are in French (except for some that are bilingual). Speak to a local and notice they use their hands while talking, just like French people! In Toronto, everything is in English, to the point that it feels like Quebec and Ontario are in two different countries.
Would it make sense to establish a business in Quebec and put all the signages in English? Well, I am inclined to say no. Simply because your audience will be in, its majority, francophone! And if you make things harder to your client, marketing 101 teaches us that this is a no-no!
Within the anglophone community, we also see a difference.
Take Vancouver on the west coast. They speak the same language as Toronto - English! But when you get to know people in both cities, it feels like you are talking to two different beings from two different planets!
Vancouverites love nature, to the point that you're likely to hear something about trees, nature, and CO2 emission (and real estate, always real estate) in any conversation! Torontonians' main priority has always been about work, work, and the Raptors winning the last NBA Title!
How do we market the same product or service to those two different cities, even though they speak the same language? That's a marketing challenge, alright…but having this solved will be of great avail!
In terms of online marketing strategy, this is gold! If we know what ticks each community, we can develop specific keyword analysis and personalize our SEO Services to the particular needs intrinsic to that specific region.
Take, for example, a canoe reselling business that sells across Canada.
Selling canoes in Vancouver might be as simple as putting up "Canoes for Sale" to boost traffic on Google! After all, they love canoeing there! The same canoe in Quebec could possibly be offered as "Canoë à Vendre", cuz well it's in French!
Selling canoes in Toronto would require a more effective approach like - "Ways to disconnect from Stress" - because of the big city-no time vibe in Toronto. Having a canoe can be a great solution to decompress!
My next example will touch on the cultural particulars of a country where we have many clients - Brazil (where people speak Portuguese, not Spanish!).
Brazil is the biggest country in Latin America, with many big cities, spread thousands of miles apart. It's always interesting to see the different behavior patterns within each region. Take Sao Paulo and Rio de Janeiro, two of the country's biggest cities- apart from over 300 miles from each other.
Sao Paulo was built over the sweat of industrial development and hardworking immigrants from Europe, Asia, and the Middle East. Rio was established as a former capital of the country, with bureaucrats and beautiful beaches bordering the Atlantic. Needless to say, because of the history of each city, their people are entirely different.
Paulistanos (people from Sao Paulo) pride themselves on being hardworking and perceive the Cariocas (people from Rio de Janeiro) as the bon-vivant type and, to a certain extent, a bit lazy.
Cariocas love the fact that the city has a more chill vibe, its people easygoing. They tend to see the Paulistas as no fun and uptight.
When we try to build an online marketing strategy on the national level, catering to the specific regionalities of this continental Portuguese speaking country, what do we do?
When building our SEO Strategies, understanding that the Paulistas are more urban-oriented will require us to crack our heads and develop keywords related to this attribute. The same thing applies to the samba-loving, beach-going Cariocas. Coming up with an SEO plan to sell to them will require a deeper learning of casual behavior!
Crazy stuff happens when two big cities in the same region but that are so different from each other collide. Paulistas refer to cookies as bolacha. Bolacha for Cariocas is called biscoito. Stereotypes fly over our ears - Paulistas on Cariocas: "Yep, they don't work… They just want to have fun…only think about going to the beach, play soccer and samba all day"! Cariocas on Paulistas: "Those guys are uptight - they are jealous cuz we have beautiful beaches, and we can enjoy it whenever we want"!
I have to go back to my disclaimer above! I'm not trying to judge those stereotypes, whether one may perceive them as derogatory or true. However, as a strategy focused Online Marketing Agency, I just believe that within those stereotypes lie great information that can be explored to build a very successful Marketing Strategy!
Rival cities in the world: New York vs. Boston, Toronto vs. Vancouver, Johannesburg vs. Cape Town, Rio de Janeiro vs. Sao Paulo, Shanghai vs. Beijing. It is not all about sports anymore!
Effective Marketing is about knowing rivalry attributes or regional characteristics to leverage information and provide easiness to our target market!
Confession: I love at least one aspect of every city I have been on this planet. And I have a few things that I don't like about some either. But people…regardless of where they come from, there are cool dudes and dumb dudes everywhere! Let's just be happy and learn to understand each other!
Written by Leo Ang @ Ingols Digital Business!
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