Long live Free Shipping Day! Who pays for free of charge delivery?

For several years, Free Shipping Day has been a one-day event taking place each year in mid-December. On Free Shipping Day, thousands of online retailers offer free shipping and guarantee your items by Christmas Eve. This year, Free Shipping Day will be Saturday, December 14, 2019. Customers are happy about it, but sellers are even more so, as their turnover rises by several hundred percent. Never ever google for the product you have already purchased if you do not want to spoil your good mood. Why? Well, it may turn out that you may find a store where you have to pay for delivery, but the price of the product which you are looking for is much lower …

Of course, all customers are prudent, and are able to calculate as well as to search.  Would traders rather lose than raise their prices a few days before the DFD, announce it as a promotion and at the same time offer free delivery as an incentive? No way! After all,  it’s been known since the time when Voltaire and Leibniz lived, we live in the best of all possible worlds. However, this does not mean that the couriers provide their services as charity act, unfortunately. So the fact is that someone has to pay for the shipment. That someone, Dear Customer, would be you.

Free shipping – a customer’s red flag

You may see what kind of magical power “free shipping” has in some stores which celebrate DFD for … 365 days a year. It’s just nothing more than including the cost of delivery in the price of the item. The amount to be paid for delivery does not disappear, nor even decrease – it is only put in a different column in the cost for a customer.

After this operation, you can insert information about the “free delivery” in the product description and wait for the magic to start working and customers to start buying. And if they don’t? Don’t worry. According to the report prepared for the Ceneo.pl price comparison engine, the second most important factor (after the price of the goods) in purchasing decisions is the delivery cost.

You want to act rationally, but you buy influenced by your emotions, and many of your decisions – when considered in the cold light of day – may seem illogical. It turns out that having a choice of free delivery worth several zlotys or a discount of 10 percent of the whole order value, most customers will choose “delivery PLN 0” without hesitation.

Buy for PLN 99.99 and you will be saved

Bigger sellers can negotiate the prices of courier services. However, they still have to pay something. And if so, you need a way to transfer that to the customers – preferably in such a way that they feel like winners, not losers.

One of the most popular ways is to set up a limit above which delivery is free of charge. It can be 20, 100, 200 or 500 PLN. Most often the magic threshold is located somewhere between 99 and 199 PLN. It can not be too low, because it will be unprofitable for the seller. Neither can it be too high, because, instead of encouraging, it will make customers confused and scare them off.

Research shows that about 60% of customers will add, without hesitation, some inexpensive products to the shopping basket in order to reach the limit for free delivery. It doesn’t need saying that most of these additionally ordered objects are of questionable usefulness, and you would never buy them on their own. Traders who are able to build an effective cross-selling strategy and are aware of the Diderot effect, are able to make you fill your shopping cart with goods that not only did you not plan to buy, but you did not even know that they existed before entering the e-store.

Currencies: time, interest and personal details

Even if you don’t buy more expensive goods (whose price includes courier services) or unnecessary, low-value products helping to clear the seller’s warehouse storage space, the e-store is obtaining its benefits anyway.

The value that the e-store is gaining is your time spent on browsing the store’s offers. A simple search for products with free delivery or trying to “match” goods to reach the limit of free delivery forces you into a thorough, tiresome study of the store’s offers. Under normal circumstances, you would probably not want to do it, even in return for a payment.

Free delivery is sometimes used as one of the bonuses for registered customers, that is, those who have revealed their personal data to the shop. As another example, you may get free delivery upon completion of a questionnaire (free market research) or upon your consent to receive the newsletter with the store’s offers. This is a great way for traders to get to know their customers and, as a result, to be able to encourage them to shop more effectively.

“Free shipping” is also often dependent on completion of the order before the promotion expires and on quick settlement (the most convenient and the most reliable payment form from the point of view of the store). So what if exactly the same promotion starts just after this current one? First of all, you do not need to know. Second – remember the advice from the beginning of the text: do not check and you will be happy.

Win-win?

A sales strategy based on free shipping can be an effective way to increase turnover, or to get rid of “slow-selling” products from the warehouse, or to trick customers to get acquainted with the store’s offers and gain trust. The most important thing is to make the customers feel convinced that they are the winner in this game – or in the worst case, the transaction was win-win situation for both sides.