April 18, 2022 · Written by Tanya Sommers
We have recently conducted a survey to learn how important the shipping rates are for online customers. Overall, we wanted to understand how much of an impact the cost of shipping has on online retail sales.
One of our respondents stated,
"The expense of shipping is a significant deterrent to my online shopping. I don't want to be under the impression that I'm paying extra when the shipping cost at this shop is higher than the others. I also very much consider shopping for clothes at an online store that provides free returns."
High shipping rates could be one of the reasons why customers abandon their shopping carts. Research conducted by AlixPartners, a financial advisory and global consulting firm, found that the high cost of delivery is the number two top reason why online customers decided not to order from an online shop.
Here are the most common reasons why customers prefer not to purchase from an online shop according to AlixPartners survey.
1. Need to see or touch the item before purchasing (37%)
2. Cost of delivery too high (36%)
3. Concerns about quality or freshness of a product (26%)
4. Ease of returning the item (20%)
5. Loss or damage in transit (17%)
6. Concerns about the size or fit (16%)
7. Better selection in local store (15%)
8. Concern about getting the right part or item (13%)
9. Better total price in local store (13%)
10. Installation service unavailable (11%)
11. Arranging for removal of old item (11%)
12. Difficult to get item into the house once delivered (10%)
13. Not at home during the day to receive shipments (10%)
14. Too long to deliver (10%)
15. Service on item after purchased (9%)
16. Concern with getting a different item than ordered (7%)
17. Privacy concerns (4%)
18. Can’t track the item while in transit (3%)
19. Weekend delivery required (3%)
AlixPartners
Source
Another research firm, Usability Sciences, found that 56% of all shoppers browsed for products, but only 19% placed an item in their cart. The second most commonly mentioned reason for abandoning their shopping carts was, 'the shipping costs and options were unacceptable. Out of the 19%, only 7% of shoppers completed their transaction.'
These 12 percent of abandoned orders could have been saved if a more flexible shipping alternatives, such free shipping was offered.
Usability Sciences discovered an increase in the number of products added to shopping carts and an increase in the price of the items in the shopping cart when free delivery was offered in a separate study.
In our recent survey, it was also determined that shoppers aren't happy if the delivery time is too long. Even though the delivery is free, shoppers are not willing to wait for their orders to arrive if it takes longer than expected.
To wrap things up, we've learned that because shipping cost is added onto the total price of an order, it can significantly influence the buyer's decision to purchase at a particular store. Most of the time, free delivery helps buyers overcome the shipping cost barrier while also encouraging them to purchase more products. While free shipping increases conversion rates and cart adds, there is still a limit to what customers will accept for free.
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