In a recent study on shipping from Compete.com on e-commerce behavior, respondents favored free shipping as the primary driver for doing business online. In fact, they favored free shipping 2/1 over free returns. This doesn’t surpise me at all. All of the e-commerce sites I own have free shipping.

How do you offer free shipping and stay competitive on price? I have 2 ways of answering this and it all depends on whether or not you have a unique product or a sku that many other websites have.

Unique Products - If you have a unique product that no one else has or is hard to find, then you should simply build shipping into the cost of the product. Find an average shipping cost (you will win on some and lose on others) and build it right into the price of the product. If you sold Widgets that no one else has, as an example, and shipping is $500, then put that price right into your product. You may think I am crazy here, but I have a lot of data to back this up. I have a website that sells Outdoor Furniture. The standard retail on our product is $2000. We have a really good product, only a few other stores have it, so I can get away with a little more. The minute I took the $350 average ship price, added it to the price of the product (which now retails for $2350) my conversion went from .025% to .04%. That might not seem like much, but when you are dealing with a $2350 product, that is literally $80,000 more sales a month.

Sku-based products - this methodology gets a lot more complicated when you sell a non-unique product that a lot of other websites offer. Do you compete on the price level, offer free shipping, or possibly, is it a combo of the two? It really all depends. Here are some scenarios that I would use in different circumstances:

1. You offer a product that is $100. Standard shipping is $20. Everyone else offers the product at $100 plus shipping. I would sell the product for $110 and offer free shipping. You will make up in conversion (more sales) for the $10 loss in margin.

2. You offer a product that is $30. It is really heavy, and shipping costs $30. This can get really complicated. You are dealing with a couple of problems here. No one wants to pay shipping costs that equals the product cost. Most likely they will leave your site and try and find in locally.  It is the psychology of it, nothing to really do with the price. This might be the one time I would not offer free shipping, but something that is close to as good. Flat rate shipping. If the average shipment costs $30, then I would offer flat rate $15 shipping and splash it all over my website. If you do this, you need to imply that this is a great deal, a huge promo, and it is going to end soon.

The moral of the story is try to get creative when offering shipping. Understand the “win some / lose some concept” but as long as your bottom line at the end of the month shows you are making more money, then let that be the driver.

Consumers don’t want a complicated shipping scenario. If you cannot tell them what your shipping is in a single sentence, then your conversion rate will suffer. Guaranteed.

Offer Free Shipping, Increase Conversions, Easy as that.

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1. Are my goals being 100% tracked? Meaning, do some of your leads/sales come by way of phone? If they do, you need to either figure out a way to track phone calls or spread the conversions across all of your ad campaigns in proportion to the amount of traffic these campaigns produce.
2. Are you judging your winning and losing campaigns with data significance? If you are only getting 200 visits a day to your site, with an average conversion rate of 1%, you would need to run your campaign for 10 days to get enough data to really understand if it is working or not working. Prematurely judging or reacting to a campaign would be like deciding on whether or not you liked a movie in the first 10 minutes of it starting. Make sure to get a real picture look before making a decision.
3. Once you feel you hit data significance, react swiftly and decisively. Do not prolong the inevitable.
4. Are you exhausting the long tail? Especially for search, long tail keywords (3 word phrases +) will be a positive ROI for your campaign 99% of the time. The problem is, there is not a lot out there. Make sure that your are exhausting budget here first, and if there is any money left over, spend it on the broad keywords.
5. Don’t panic, there is still money out there, there are buyers. I still have to wait to get into my favorite restaurant or by a shirt at my favorite botique. Right now is the most amazing time in any of our generations to win market share from large companies unable to make a move. Best Buy is probably spending more money advertising right now to win all of the market share that Circuit city just left behind. Take advantage. There are always lots of positives in a bad economy!

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1. Increase your paid search bids buy as much as 100% (I would watch this closely). So long as your website conversion is climbing, your roi should be fine.
2. Increase your shopping engine spend. Shopping Engines like Nextag, Yahoo, shopping.com, etc. are like Westfield malls, they get their highest traffic volumes during November and December.
3. If you have a product that can make it to their home in time for the 25th., make sure to advertise that all over your site. No call to action is more immediate, and nerve-racking for a visitor with the thought that the present wont arrive.
4. If you have a large item that wont make it in time for the big day, find a small gift, representative of what they are getting so that the loved one can wrap something. A close colleague of mine sells massage chairs that traditionally take 2 months to get. He would send a massage chair pad with every order so the gift-giver had something to wrap up.
5. Don’t automatically shut your campaign off on Christmas day, too many companies do this. Take advantage of post-Christmas shopping. Also, not everyone celebrates Christmas, so those people are still buying.
6. Get your site ready to trigger a “post Christmas” day sale and launch it early morning on the 26th. When new years comes, do the same thing.

Hope these help!!!

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1. Asking “what Country are you in” (especially those carts that do not offer international shipping)
2. List credit card type (um, simple programming: starts with a 3=Amex 4=Visa 5=Mastercard 6=discover)
3. Having more than 4 steps. Limit them, get them in and out of your cart as quickly as possible!
4. Having a “clear cart” button – why would you want to put this idea in your head
5. Offering too many up-sells – online shoppers are easily distracted (phone ringing, boss asking what they are doing) so don’t confuse them with up-sells until AFTER they submit their previously intended order.
6. Newsletter Options – Don’t freak them out by making them think you are going to spam them, ask this question on the confirmation page
7. Shipping Options – List shipping cost BEFORE the person enters their credit card. Customers want to know the absolute total before they feel comfortable enough to pull out their credit card.
8. Let them know how many steps are left. If on step 3, they don’t know how much longer the process will go, you may lose their attention. Let them know that they are almost done.
9. So long as you have a decent return policy, remind them what the basics are next to each of the submit buttons. Sometimes they just need a little reassurance.
10. Let them know (in big and bold) that your website is as secure as it gets and they have nothing to worry about. I even think going as far as a hacker guarantee is a good move. At the end of the day, your customer is protected by the credit card company, so you wont be holding the bag for much if your site gets hacked.

I could go on and on but I think these 10 are the basics. Always think of your customer as having ADD and paranoid. Solve these two problems and you should have a lower than average shopping card abandonment rate.

Spider Test: Daytona Qualifying , Grammy Performers

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