Free Shipping - 5 good reasons to offer free delivery

MoreComputers.com is a successful, award winning online retailer. I've recently been trialing 'free delivery on everything' and monitoring the sales results closely. This blog post outlines the good reasons to offer free delivery based on my real experience as a major retailer. I intend to do a post on what I see as the reasons not to offer free delivery next.

You'll find lots of free shipping articles online from research companies and marketing 'experts', but I hope this will give you an insight into a genuine use of free delivery. From this and my next post I hope you will be able to decide if free delivery is the right thing for your business. At the end of the day it will hurt your profit if it's not.

Here's a bit of information on our trial to put things into context. We sell thousands of different products and make thousands of sales. We added the words 'Free delivery on everything' next to the prices on our site. Then 'free delivery within 5 days' was added as an option in the basket along side 'next day at £9.95+vat' and '2 days at £4.95+vat'. We told our existing customers about the new delivery option by email. We added free delivery to our price comparison data.

So I think it's fair to say we haven't really used free delivery to drive new customers to our site as yet, we wanted to see the effect it had on conversion based on our existing traffic levels.



So here's my 5 good reasons to offer free delivery

1. It removes a sales barrier.
I'm convinced of this. Before starting our trial I'd read 43% of online shoppers said they abandon a purchase because the delivery charges were too high. So far in our trial I'd say we've seen a marked increase in sales from the same amount of visitors.

2. Customers want it.
There certainly seems to be a whole set of customers who think free delivery is the most important deal clincher. It's always a talking point. I spoke to an affluent businessman recently who spent £1500 on a new laptop - he couldn't tell me anything about it other than he got free delivery. I've also worked in a company that had a 'we don't pay for delivery' policy. It was supposed to make you haggle over the delivery cost, but it made people pick a supplier with free delivery.

3. You win more new customers.
When we removed our delivery charge we immediately notice more lower value items being bought. Whilst we obviously don't make much profit on sales like these, I see it as a cost effective way to win new customers. They experience buying from More and with their permission I can send details of new offers and remind them of our existence. Over time we may build a relationship and they may purchase again and even go on to recommend us. Looking at our data I can see we're getting more consumers shopping with us, probably because they're not as dependent on receiving their orders next day like some business customers.

4. You will retain your customers.
Customers remember free delivery and I'd like to think it helps us to stay on their shopping list. I often hear 'I shop there because it's free delivery'. In my research I read in a ComScore study 72% of those surveyed said if an online retailer stopped offering free shipping, they would leave them and do business with one of their competitors. It seems like a loaded question to me but I believe free delivery combined with a previous good shopping experience will cut down the amount of shopping around our customers do.

5. Not all customers will select free delivery
This is something we are monitoring very closely. So far it looks like the percentage of free delivery compared to paid is sustainable. Probably down to the nature of what we sell, but our next day and 2 day delivery options are still being used significantly. It looks like our business and IT professional customers require next day deliveries and are happy to pay for that service.

Follow me on Twitter to make sure you get my reasons not to offer free delivery.

Please leave a comment about your free delivery experiences.

5 tips for smart sale shopping - Is that bargain really a bargain?

For those looking for tips and advice on Sale shopping this year, Brian Trevaskiss of MoreComputers.com provides some shopping savvy tips to ensure you get the most out of the January Sales;

1. The 'guidelines' that govern 'was' and 'now only' prices in stores have become less clear in recent years. At one time a store had to have offered a product at the higher price for 28 days prior to showing a new lower price with a saving. These days many retailers interpret things differently and items that are half price may never have been sold at a higher price. So you need to check the 'current market price' and not be fooled by a huge saving that isn't real.

2. Owners of 'smart phones' like the Apple iphone have an advantage when it comes to checking the 'current market price'. There's a clever 'app' for that - when you're out and about in the sales and spot something that looks like a bargain, you can check the price there and then. Take a photo of the barcode and the 'app' will automatically look for search results on Google and comparison shopping sites and deliver the results to your phone instantly. You'll then know if the product in your hand is a true sale bargain or not.

3. Look out for 'loss leaders', most stores are prepared to lose money on one or two genuine reductions, just to pull in the crowds. Sign up to email newsletters and check voucher/coupon sites ahead of the sale start date to be sure you know what these are. You may also get advanced notice of sales and be able to beat the queues by shopping online. A lot of stores prefer to clear stock online than ship it around their actual shops.

4. If you miss out on the 'loss leaders' it might be worth waiting for the end of the sale when stores reduce prices further to clear stock. Don't be afraid to ask when a sale is due to end, most assistants will be able to tell you. This can also give you a chance to check online prices.

5. Don't be distracted by 'sale blindness' ask yourself would I still want this if it wasn't reduced? If you feel the urge - remind yourself that the reason the majority of products are in the sale is because no-one wanted to buy them at full price. It may be old stock or a piece of technology that simply doesn't work very well.

More news in the news

Great start to the day today, my in box had three separate bits of More news coverage waiting for me to look at. The first one I looked at was my online shopping tips for Christmas in The Yorkshire Post that can be read below

Then both the Sheffield Star and the Creative Sheffield websites have featured our round up of the year and the launch of our new MoreFrom.co.uk website.

Here's the links:
In the Sheffield Star:
Online retailer taps into new markets

On the Creative Sheffield website:
More from MoreComputers.com

It's nice to look back on what's been a fantastic year for More and to look forward to an exciting 2010.

Click on this image to enlarge.

Sony L11S1E/S - The Future is Here!

There is one product in particular which is selling like 'hot cakes' at the moment, many of our customers may have this in mind for the perfect Christmas gift or just upgrading their current set-up- I am taking ofcourse about the Sony L11S1E/S all in one desktop PC.

Enjoy a new family entertainment experience with multi-touch screen and it's Slim and stylish design saves space and can fit in any room. Not only is this product one of our best sellers, but it is on the PC Pro A-List and is great value for money. Along with a 500GB Hard Drive, 4GM of memory, Blu-Ray Drive and 3.0GHz Intel processor, the Sony L11S1E holds massive entertainment and work-related potential.

5/5 for me.

Danny at More