Thursday 21 January 2010

Free Shipping - 5 good reasons NOT to offer free delivery

So I've covered 5 good reason to offer free delivery in my last post, might be best to read that one first if you haven't already. Our trial still indicates free delivery is working for, but I'm conscious it might not be the case for every online store.

Here's my 5 reasons it might NOT be right for you:

1. Free must mean free - you may not be able to do that
Internet shoppers are on the whole a savvy bunch. Whilst I believe they'll check out an offer with free delivery first, they will still visit other sites and go through the order process to check the final price. If you've simply included the delivery cost in your price and that makes you the same as the other site, you'll lose the sale. Why? Because the shopper is on your competitors site and it's easier to click their buy button than go back to you.

2. You need a mix of delivery options
One of the key reasons free delivery works for us is we are able to offer Next day delivery, within 2 days delivery and our free option is within 5 days. Our customers have different delivery needs so there's a mix of delivery selected. If we only had the free delivery option it would not be sustainable. The mix of options means on average we are losing less overall.

3. You need a mix of products
You may offer a mix of delivery options but if you only sell one product or one type of product it may not work. If that product is something the majority of people are prepared to wait a week for, nearly everyone will choose free delivery.

4. You need a mix of customers
I believe our trial is working because we have a wide mix of customers. The IT managers and trade dealers who buy from us often need something next day to solve a particular problem. On the other hand we have consumers who do not need a product quickly and are available to accept a delivery at anytime. These seem happy accept the inconvienence of not knowing when their purchase will arrive. If you only sell to customers who are flexible when it comes to deliveries, they'll all opt for free shipping.

5. You've worked out you can offer free delivery - but only with a catch
This is a personal thing more than anything but I don't like 'Free Delivery*' it's that dreaded asterisk that immediately says there's a catch. Even before you've read what the catch is you feel cheated and start to distrust anything the company says. There are many tactics being used, most common is 'free delivery when you spend over £X' It's worth considering especially if you have a shop that sells things customers will always need and will be happy to add to their basket to reach the minimum order value. But do it without the asterisk. I would avoid *only on selected items *to a local store *only when you buy an over priced accessory *on items under a certain size/weight.

I hope these free delivery posts have been useful, be sure and follow me on Twitter for more online retail insight.

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