Retail is an incredibly competitive industry, especially eCommerce retail. Not every organization can offer free shipping; in fact, very few actually do. At Clarity, we work with eCommerce businesses on a daily basis. Whether your vertical is automobile parts or baked goods, we have experience in helping our customers grow and flourish. Our most successful clients use an array of different strategies and techniques to maintain margins, while still driving sales.
Threshold-based Shipping Promotions
It is difficult for retailers to offer free shipping without a threshold. Setting a minimum number of items or services, often above the average transaction of a site, generally drives more units per transaction.
Email-only Shipping Promotions
Several clients stated they simply do not advertise or market any shipping promotions on their site. Instead, they effectively communicate special shipping offers to their most active and loyal customers via email.
Shipping Promotions only on key items
Companies have to abide by margins to stay alive. By offering free shipping on select items, retailers can mitigate some of the expenses associated with free shipping. There is some difficulty communicating this promotion effectively, but it can certainly help drive incremental purchases.
Our clients have reported that this can be an extremely effective strategy. Be careful. This can penalize customers who only want to purchase a small item or quantity.
Free to Pick Up
Retailers already have to pay to get the products in their stores. Successful retailers are increasingly likely to drive their shoppers to their stores and to encourage them to accept delivery in that channel. Not only does this eliminate their shipping fees, but it also entices individuals to purchase additional products at the store.
Incorporate Shipping into Item Price
Some retailers reported that incorporating the shipping cost into the item price was effective and “fair” to customers because they wouldn’t be surprised later on. This can be a challenge for multi-channel retailers with those same items available in stores because the in-store items may therefore appear to be cheaper. However, for “long-tail” items (products that are not commonly sold) or an extended assortment of items, this is a viable strategy.
By offering your best customers the opportunity to buy into a customer loyalty or shipping program, retailers increase their likelihood of creating customers for life and increasing consumer values.
Fee-based Shipping Loyalty Program
Amazon Prime is one of the most highly touted fee-based shipping loyalty programs around. Small to medium size businesses can implement this too. Retailers employ shipping programs with flat annual fees that provide shoppers the privilege of shopping without shipping charges at a given site or site(s).
Some of our retailers have opened new distribution centers or relocated their distribution centers to be more centrally positioned. By staying closer to your customers, the average cost and delivery time in transit of outbound shipments decreases.
Clarity is not only an expert in developing web technologies, but helping ensure our clients succeed. Feel free to talk to a consultant and learn how these strategies can help grow your business.