Introduction

You know those times when you spent ‘just a bit more’ during your online shopping spree to qualify for free shipping. Yeah…might not be as ‘free’ as you thought.

Sorry to burst your bubble. Let’s take a look a bit deeper 👇

Weekly Insight

It’s funny how us humans think.

You’ve just done on online shop, your cart is full, but you’re ‘just below’ the threshold required for free shipping.

Well, rather than paying the extra $10 or so for shipping, why not just spend an extra $20 on that cool shirt you were on the fence about? Only $10 extra then what you were going to pay anyways for shipping, and now you get the shirt and free shipping?!!

Okay, you see what just happened there?

Before, you were reluctantly going to spend $10.

Now, you happily spent $20.

Who’s really better off in this situation?

For CRO, free shipping is a goldmine and gives us a deep look into the psychology of our users. Let’s see why.

Majority of people would agree that the ‘$12.39 & FREE Shipping’ option above is more attractive than the ‘$10.00 + $2.39 shipping’.

But they’re the exact same thing in terms of cost!!

Now, this doesn’t really make so much rational sense, but it’s all to do with the positioning of the offer.

When we take Option 1 (cost of product + shipping cost), the average customer views this is as two separate costs. You don’t need a rocket science degree to do the math, but it does add a small element of friction into the equation.

Option 2, however, removes the friction and tells the customer exactly how much they need to pay for the product, removing any additional or hidden costs. The ‘FREE shipping’ makes it feel like you are getting a bonus and that the product must be worth paying for if it’s qualifying for free shipping - increasing the chances of the customer going through with the deal.

This phenomenon displays some elements of the Decoy Effect which helps explain why us humans tend to behave like this.

You can also take a look at Dan Ariely’s study of The Economist’s subscription offerings which illustrates a great example of the decoy effect and is super interesting to check out!

Is it ever a good thing to have shipping costs?

For large, once-off ticket items, like furniture or big appliances for example, it might be a good idea to include shipping. When making purchases like this, customers are making more informed decisions and are less likely to worry about shipping costs since they are already spending a lot of money.

When they see a fixed shipping cost, they may even tend to spend more to ensure they are getting the most value for their money. In this situation, the shipping costs are sort of ignored and rather just seen as something they would always have to have paid to get the item.

In summary, deciding whether or not to include shipping costs really depends on the positioning or framing of your offer, and the size of the product. Sometimes, you can convince customers to spend more to get free shipping, while other times it is expected and actually beneficial to include a shipping cost. Do the research and experiment with different tactics to see which works best for you.

Case Study - Free Shipping

When we added ‘Free Delivery for orders over R1000’ above the buttons on the Product Display Page, we saw an overall revenue increase of 6.9%.

This illustrates how users were willing to spend a bit more and increase their order size in order to qualify for the free shipping.

News

📣📣 Podcast Alert!

See the recording of our very own Elijah Greenhill in action with Santosh Kumar from GuidedPPC as they discuss the various ways in which CRO can amplify PPC performance. Hear them discuss topics such as:

• The vital role CRO plays in scaling PPC campaigns

• Actionable strategies for enhancing landing pages to boost conversions

• Data-driven CRO insights that can lead to a stronger ROAS
  
  

and much more!

WATCH HERE

Conclusion

In conclusion, free shipping can be a powerful tool for CRO, but it all comes down to how you frame the offer. By removing friction and positioning shipping as a bonus, you can encourage customers to spend more and increase conversions. However, for high-ticket items, it might make sense to include shipping costs upfront. Ultimately, experimenting with different shipping strategies can lead to valuable insights that improve your sales process. Don’t forget to check out the case study showing how a simple "Free Delivery for orders over R1000" boosted revenue by 6.9%.