The Psychology Behind FREE Shipping: Should I Implement That?
Have you ever wondered why a $25 shirt sounds too expensive, but if the same $25 shirt comes with a free shipping offer, you can’t help but buy it? If so then, we have got you all covered!
According to Hubspot:
In fact, 93% of online shoppers say that free shipping would encourage them to make more purchases online
That’s why we’re diving today into the consumer psychology behind free shipping, how it works its magic, and why every online store should get on the free shipping train.
So, let’s get started!
Why Do Shoppers Love Free Shipping?
First things first, let’s talk about what free shipping is. It’s exactly what it sounds like – when you order something online, and the store sends it to you without charging any extra fees for shipping. Sounds simple, right? But there’s a lot more going on beneath the surface.
Let’s break it down!
The Psychology of Saving
When you see that you’re getting something delivered for free, it feels like a special offer. Even if the item’s price is a tad higher than another store’s, the lure of not paying shipping costs often seals the deal.
It’s a bit like getting a free dessert with your meal at a restaurant. You might have been on the fence about dessert, but once you hear it’s free, you’re all in! The same goes for online shopping. That “free shipping” label acts as a trigger, activating the pleasure centers in your brain, and making you feel like you’re making a savvy choice.
The Pain of Paying
Ever felt that little twinge when you hand over your hard-earned money, even if it’s just for shipping? That’s what we call “the pain of paying.”
It’s that nagging sensation you get when parting ways with your cash, and it plays a fascinating role in how we perceive and make purchasing decisions.
When the shipping is free, that pain just disappears, like a puff of smoke. And suddenly, your purchase feels like a guilt-free indulgence where you think “Well, I was going to buy this anyway, so why not when it’s shipped for free?”
The Fear of Missing Out (FOMO)
FOMO, or the Fear of Missing Out, is real, my friends. When an online store offers free shipping for a limited time or on orders over a certain amount, it triggers our fear of missing out on a good thing.
We think, “I better snag this deal before it’s gone!” It’s a powerful motivator to click that “Buy Now” button.
Online stores often use this tactic by offering free shipping for a limited time or on orders over a certain amount. It’s a win-win – shoppers feel like they’re getting a special deal, and stores see a massive increase in sales.
The Illusion of Value
We all love a good deal, right? Free shipping feels like a bonus gift, even if it’s not. It makes us feel like we’re getting more value for our money.
Imagine you’re buying a $30 item with $5 shipping versus a $35 item with free shipping. Which one sounds like a better deal? You guessed it – the one with free shipping.
The word “free” has a magnetic pull that’s hard to resist. It’s like a universal language that says, “Hey, this won’t cost you a dime extra!” Our brains light up with joy when we see it, and we’re more likely to take action.
And guess what? We’re more likely to come back to that store for more shopping because our brains crave that rewarding feeling.
So, Why Do Stores Offer Free Shipping?
Now that we’ve peeked into the psychology behind free shipping, let’s talk about why online stores should hop on board.
Increased Sales
When customers see that sweet “free shipping” tag, they’re more likely to make a purchase. It’s a simple equation: more sales = more revenue. And who doesn’t want that?
Offering free shipping isn’t just about the first sale; it’s about the long game. Customers who have a positive shopping experience with free shipping are more likely to return.
They’ll also be more likely to recommend your store to friends and family, creating a chain reaction of new customers. This increases traffic to your store, thus boosting sales.
Reduced Cart Abandonment
Shipping costs are one of the main reasons shoppers abandon their carts. Cart abandonment is a headache for online retailers. Because no matter how tempting an item is, it is always hard to spend one’s hard-earned money-remember “the Pain of Paying” psychology.
Eliminate this hurdle, and you’ll see how positively it affects your store. When customers see that shipping won’t cost them extra, they’re less likely to abandon their carts and more likely to complete the purchase.
Build Trust
Imagine you’ve found an online store that not only offers great products but also provides free shipping consistently. What do you think you’d do? You’d probably bookmark that store and keep coming back, right?
That’s because free shipping builds trust and loyalty. When your store offers it, you show that you care about your customers. It shows that you’re willing to go the extra mile to make their shopping experience better. That’s a win for your brand image.
And guess what? If your customers are happy, they are more likely to become repeat customers.
Consumer Satisfaction
Happy and satisfied customers are the heart of any successful business. When customers don’t have to pay for shipping, they perceive the overall cost of the product as lower, making it more attractive and affordable.
And once your customers are satisfied with your services and offers, they’ll think of you first whenever they go online shopping.
Outshine Competitors
In the vast online shopping landscape, competition is fierce. So if you want to stay ahead of your competitors, you’ll have to think of ways you can perform better than them, and free shipping is one of those methods.
Offering free shipping can be your secret weapon to stand out from the crowd. Customers are more likely to choose your store over a competitor’s if they see the magic words: “Free Shipping.”
Should I Implement Free Shipping on My Store?
Well, after just going through all the benefits of free shipping, the answer to this question is a BIG YES! But, yup there is a “But” too!
Free shipping is a great way to increase sales of an online store. But if you start offering free shipping for all your products, your chances of getting broke are pretty high.
So to avoid that, there are a few points to consider if you want to apply this free-shipping technique in your store. Let’s have a look at them!
Consider Your Margins
Providing free shipping can boost your conversion rate, and there’s no doubt about it!
But you need to be cautious because it could eat into your profits. And if you are just a small business, this will cost you a fortune. So before you decide to offer free shipping to your customers, think of your margins, as in how much you can afford.
You can rely on plugins like our Cost of Goods Sold COGS to make informed decision about your products costs, and to which extent you can hold extra charges (like shipping) to still be profitable.
Remember, offering free shipping means you’re covering the cost of sending out orders. The simplest way to handle this is by including the shipping cost in your product prices. This way, customers don’t see an extra shipping charge, but it’s already covered in what they pay for the product.
You have a couple of options here. You can raise your product prices enough to cover the entire shipping cost, or you can bump them up slightly to help with part of the shipping cost.
For example, if the price for a product is $5 and the average shipping cost is $3 per order, it means you’d lose $3 every time you offer free shipping. If your customers buy four $5 items, equals a $20 order plus $3 for shipping, making it a $23 total order.
However, if those same four items are priced at $6 each, it’s a $24 order with free shipping.
But hold on a second! Adding the shipping cost to your product prices might not always be the best strategy. If it makes your products more expensive compared to your competitors, it will negatively impact your sales.
The Size of Your Products Matter
Large or heavy items can also affect your shipping rates. If you don’t consider the higher shipping costs for these bulky items, your free shipping offer might not be as beneficial as you’d hope.
To play it safe, exclude those big items from your free shipping deal. Your prices should be set based on different factors such as handling, packaging, and delivery. Keeping all these factors in mind, if the shipping cost for a $5 product reaches around $7, then offering free shipping on that product would be a really bad idea.
Set a Certain Purchase Threshold
Another way to avoid getting broke while providing free shipping is to increase the minimum purchase threshold. For example, if your store offers free shipping for over $125, The customers will spend more to qualify for free shipping, and this helps you stay within the budget.
You can use plugins like our top-rated “Free Shipping Over Amount for WooCommerce” where you can offer free shipping when customers meet a specific amount/spend.
Remember, this is just a testing phase. See what threshold brings you more conversions. If you feel there is a lack of conversion at $125, decrease it to $100 and see if this works. There is no one-size-fits-all rule for this, so do what works for your store the best.
Plus, another great way to increase conversions is by offering free shipping on off-season items. They way customers will feel the urgency to buy them fearing they’ll get sold out.
Wrapping it Up
Free shipping isn’t just a simple perk; it’s a powerful tool that plays with our minds in the best way possible. It removes barriers, triggers our desire to save, and makes us feel like we’re getting a great deal.
For online store owners, implementing free shipping isn’t just a good idea – it’s a must. It can boost your sales, build trust with customers, and keep them coming back for more.
So apply a free-shipping strategy to your store and watch your store customers grow rapidly!
