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Shipping Discounts

Do you know why your sales are dropping?

Or perhaps you’re scratching your head over the high rate of abandoned shopping carts?

Before reading this blog, consider where you might be losing customers in your funnel and the root cause.

Read More: Customer Journey with Inbound Marketing Funnel

You might be making $$$$$ in the first year, and some time later, sales drop gradually. You don’t seem to understand where the problem lies.

What would you do?

Monitor conversion stages, analyze your customers’ activity, create unlimited strategies, etc.

But have you noticed a thing? Users need value worth the price!

Customers might not mind the original price, but extra costs like shipping, returns, taxes, and packing fees can change their decisions—even if it’s just some extra bucks.

Because extra costs lead 48% of shoppers to abandon their cart!

How much are the shipping charges?
When will my order arrive?
What kind of extra charges are these?

These are the make-or-break questions that determine whether a buyer completes their journey.

Shoppers always look for fast delivery and free shipping. Not offering it can be a significant reason for dropping sales and abandoning carts.

In the US alone, 58.6% of shoppers have abandoned their carts due to shipping costs.

So, stay tuned and keep reading!

Impact of Shipping Discounts on Sales

Discounts on Shipping and Delivery

Shipping is your secret weapon to increase sales and profits with the right strategies. Shipping costs do have a huge impact on your sales.

  • Satisfied customers are more likely to return in the future and recommend the brand to others, directly impacting the sales revenue.
  • You can attract more customers and win market share by providing better shipping terms than competitors.
  • When shoppers shop consistently with your brand, they are more likely to repeatedly purchase, which converts into sustained sales growth over time.
  • Customers can opt to add more items to their cart to qualify for free or discounted shipping, thereby increasing the average order value, which can directly boost sales revenue.
  • By eliminating or reducing these costs, you can encourage more customers to complete their purchases, leading to higher conversion rates.

Read More: 10 Best Ways To Increase Average Order Value

Why are Shipping Discounts so Important?

Free Shipping

As we’ve seen, shipping discounts can directly boost sales. This means that several other factors also experience a positive shift as your sales go up. These aspects can be super important for your business’s success. Let’s look at some factors that propel your business to success;

Reduces Cart Abandonment Rate

From an average of 48 cart abandonment studies, the average cart abandonment rate is 69.99%.

As we mentioned before, when customers see high shipping fees at checkout, they’re more likely to leave without completing their purchase. Providing shipping discounts or free shipping thresholds can reduce this hesitation, leading to a lower cart abandonment rate.

Customers chose these factors as the top reasons for cart abandonment—Extra costs that are too high, including shipping, taxes, and fees (48%), if delivery takes too long (23%), has a complicated checkout (22%) much more!

Always aim to recover 5% – 10% of the carts your customers abandon by giving discounts on shipping.

Encourages Repeat Business

Customers are more likely to return to a store where they know they can save on shipping costs. This is especially true for businesses that consistently offer or promote shipping discounts.

Differentiates Brand Image

In a crowded market, offering shipping discounts can help a brand stand out. It conveys that the business values customer satisfaction and is committed to providing value.

Word-of-Mouth Recommendations

According to a study by Yotpo, when it comes to word-of-mouth promotion, 60% of loyal customers will share their favorite brand with their friends and family.

Shipping discounts that enhance the shopping experience can turn customers into brand advocates.

Streamlines Checkout Process

When customers know that shipping discounts are available, they spend less time on shipping options and costs, leading to a quick, stressful checkout process.

So, introducing shipping discount policies (e.g. banners and checkout reminders) ensures that customers know the benefits early in the shopping process, reducing friction and decision fatigue at checkout.

How to Overcome These Challenges of Shipping Discounts?

Offering shipping discounts can be a great way to attract customers and boost sales, but not without challenges. In this section, we’ll look at some of the problems you may encounter when offering these discounts and some solutions to overcome them. Let’s dive in and see how we can make shipping discounts work for you.

Communication and Transparency

ChallengeSolution
Customers may be confused about eligibility for shipping discounts, leading to frustration at checkout.Clearly communicate the terms and conditions of shipping discounts on the website, including minimum order values and any exclusions.

Use banners, pop-ups, and checkout page reminders to keep your customers informed.

Cost Implications

ChallengeSolution
Providing shipping discounts can impact your business’s profit margins, especially for small to medium-sized enterprises (SMEs) with tight budgets.You can absorb these costs by slightly increasing product prices, negotiating better rates with shipping carriers, or offering shipping discounts selectively based on profitability of products, customer location, or order value.

International Shipping Challenges

ChallengeSolution
Shipping discounts on international orders can be prohibitively expensive due to higher shipping costs and customs duties.Limit shipping discounts to domestic orders or set higher minimum order values for international shipping discounts.

Partner with local distributors or use international shipping services that offer competitive rates.

Complicated Return and Exchange

ChallengeSolution
Shipping discounts can complicate the returns and exchanges process, increasing the cost of handling returns.Have a clear return policy that specifies how shipping discounts are handled in the event of a return or exchange.

Consider offering store credit to offset return shipping costs, encouraging customers to exchange rather than return items.

Read More: How to Reduce eCommerce Returns: Best Practices

Lots of Competitive Pressure

ChallengeSolution
Competitors may also offer shipping discounts, making it difficult to stand out or forcing a race to the bottom in terms of pricing.Differentiate your brand through other means, such as product quality, customer service, or unique selling propositions.

Offer value-added services that your competitors do not provide.

Integrating Loyalty Program Can Be Complex

ChallengeSolution
Including shipping discounts with loyalty programs can be complex, requiring systems that track customer purchases and apply discounts appropriately. Use loyalty program software that integrates with your e-commerce platform, allowing for automatic application of shipping discounts based on customer loyalty status.

Regularly review and adjust the loyalty program to ensure it remains attractive and competitive.

Shipping can take up too much of your budget if you don’t properly research all the available options. It’s better to explore every option you get to gauge whether it works for your business. You need strong shipping solutions to ensure they meet customer needs; it can be difficult to find information on them, so here is the link to add all up in one handy guide.

Increase Your Sales With Shipping Discounts!

Shipping discounts are more than just a cost to the business;
They invest in customer satisfaction, brand loyalty, and market differentiation.

To overcome all these challenges, you should;

  • Conduct a thorough analysis to understand the impact of shipping discounts on their bottom line.
  • Invest in technology that simplifies the management of shipping rules and loyalty programs.
  • Be willing to adjust strategies based on market conditions, customer feedback, and competition.
  • Focus on customer experience by ensuring transparency, simplifying the checkout, and providing wow customer service.

You need to find the right balance between attracting customers with shipping discounts and maintaining healthy profit margins.

When implemented thoughtfully, these solutions can lead to a virtuous cycle of increased sales, repeat business, and positive brand perception.

Rishi Thakker

Rishi Thakker

Rishi Thakker is the founder and CEO of Huptech Web, an eCommerce development and marketing firm that helps companies attract visitors, convert leads, and close customers. His unique writing tips give startups and well-known brands a palpable action plan full of innovation unmatched.

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