Delivery costs: Three theses about online free deliveries
88 percent of all online shoppers abandon their purchase process at least once because of delivery costs. As a recent study by the international delivery service UPS shows, free delivery can significantly boost sales in online retail. UFirst Group found this finding reason enough to take a closer look at the delivery costs of two online retailers, Athleticum and Vögele-Shoes.
When asked about the current pricing model for shipping costs, Swiss online retailer Vögele-Shoes gives a short and clear answer: "We have free delivery". But the path to this led via three adjustments.
Sabine Schwärzler took over the e-commerce division of Vögele-Shoes in fall 2012. The then new online store opened with a delivery flat rate of three francs. Starting in October 2015, a second step introduced free delivery for orders of ninety francs or more. The third renewal finally leads to free delivery. Since spring 2016, the customer no longer has to pay any shipping charges for her order. Possible returns, however, are still at their expense.
Branches delivery popular
Vögele-Shoes justifies this circumstance with its dense store network, which allows the customer to return the ordered shoes at any time and anywhere in the sales store. The UPS study supports this statement. The study, conducted in both Europe and America, shows that 38 percent of customers choose to deliver to the store. The channels are obviously merging.
At Swiss sporting goods retailer Athleticum, the driving force behind the introduction of a unit price in shipping was the change in the overall contract with the supplier. The decision at group level had a positive impact on services in the online store. Prior to this change, the pricing model at the retailer was as follows:
Acceptance against signature
The online retailer operated with the Swiss Post delivery price system (Priority and Economy). In May 2016, Athleticum introduced the uniform price. Excluding large equipment and extra deliveries, such as bicycles or fitness equipment, shipping for all orders is carried out at seven francs and fifty centimes. The goods are no longer sent to the mailbox, as in the post office, but delivered only by acceptance against signature.
"This is a fundamental change," says Carlo Bergamin, e-commerce manager at Athleticum, "...which we accepted. Whether there will be more customer feedback because of it is a premature prediction." Since the innovation is for product delivery security, it could have a positive impact on the buying process.
Conversion rate as a decisive argument
In the long term, Athleticum wants to follow market conditions and introduce free delivery above a certain amount. This can increase conversion: according to the study, 43 percent add more items to get the goods delivered for free.
At Vögele-Shoes, the decisive factor for the introduction of free delivery came from a competitor analysis among the most important Swiss shoe retailers.
At the time, Vögele Shoes was the only shoe retailer in Switzerland that charged for delivery. To increase sales in the online store, the company unceremoniously switched to free delivery. At the beginning of the rollout, they were worried about getting more returns. This fear proved to be wrong.
For the shoe retailer, the conversion has paid off. It has a positive effect on the conversion rate.
For more details on the UPS Pulse of the Online Shopper study, see this Link
