Shipping and return policies affect the conversion rate of you online store more than you think. Research show that 3 of the top 5 reasons people abandon their shopping cart is related to shipping, and it is not all about cost. 40% of customers say they abandoned the cart because the shipping and handling costs were listed to late. In this blog post I will share some best practices from our experience working with our international e-commerce clients.
To be able to provide the customer with the shipping rate as early as possible in the checkout process, or preferrably on the product page itself, we recommend having a fixed shipping price. Instead of hiding the shipping cost, turn it into a selling point. If you are unable to have such a fixed price due to the type of goods you sell, at least give the customer a ”shipping from” amount to give the customer a heads up.
Online customers have increaslingly higher demands to online shopping and you need to understand them. The U.S. online shoe retailer Zappos gets a lot of attention with their policy of free deliveries and returns, and in Europe the e-commerce site Zalando offers the same. Zalando was founded in 2008 as a shoe- retailer in Germany and one year later, they started to expand abroad. Today they not only sell shoes, but also clothing, sport apparal, accessoaries, premium merchandise, and stock a range of products from different well-known brands and labels. Zalando chose to use a “universal” free delivery and return service as a strategy to drive their sales - regardless of the amount spent.
If outright free shipping is not an option, consider free shipping when the cart reaches a certain amount. Nelly.com is an example of this as they offer a fixed shipping cost on orders less than €50, and free delivery on orders over this amount. This motivates customers to add an extra item into the shopping bag, and drives more sales. For this to work you need to be clear about how much the customers have to spend to get free delivery, and make sure to give them a notification when they are approaching the amount for getting free delivery.
Another take on this is to offer free shipping when the customers orders two or more items like swims.com does.
For some types of goods you have no option but to charge based on shipping size and distance. If that is the case make it easy to calculate the cost as early as possible. Ikea lets you calculate cost early by asking for your postcode/ZIP code in the shopping cart view. If you decide to use this strategy, be careful to hold the cost at a level that customers are willing to pay.
2 out of 3 customers choose the most economical shipping option, but we see that a wider selection of shipping optio
ns actually increases conversions even if they still end opting for the same shipping option as before.
Also cater for the shopper who is in a rush by providing express delivery with a clear delivery date. Make sure that you explain the various alternatives clearly. Example: One popular store offers delivery within 7 days. Do they mean business days or calendar days?
Amazon and other retailers experiment with the super fast deliveries. A Norwegian start up, Zooplt (www.zoopit.no), offers online stores to deliver their goods as fast as within 90 minutes after payment in the Oslo area.
It is however not all about speed. Sometimes it might be more important to have delivery happen at a certain time when you will be home to receive the package, than how fast it is. Expert.no use this as customers fill in their postal code, desired day of delivery, and what time during the day. This gets more and more popular as customers seem to appreciate the flexibility and increased control of choosing the exact delivery time and they know what to expect and can spend their own time better.
The start up Helthjem.no delivers products directly to your doorstep early in the morning, six days a week by piggybacking on the newspaper delivery routes. Customers can track the package online and recieve an sms when the package is delivered. If a customer would like to return an item, he or she order a return online, pack the package and place it outside the door in the evening and Helthjem will collect it from the house in the early morning.
Furthermore, companies use offline stores more and more as a pickup point and also a point of returning deliveries. Target.com use this method as one of their delivery options where the customers choose “pickup” as their delivery method. Orders placed before 7pm will be packed and ready within 2 hours, orders after 7pm will be avaliable next business day, an orders placed on a closed day will be ready on the next working day - two hours after opening time. However, packages that are not collected within 4 days will be put back to the shelf (http://www.target.com/c/store-pickup/-/N-55fqz). Target offers this service free of charge. In Europe this method grows as companies expandingly intergrate offline business with online.
Furthermore, to have a good return policy will increase the satisfaction of online shoppers and perceived product quality. 66% of customers check the return policy before they shop online (http://www.websitemagazine.com/content/blogs/posts/archive/2014/07/21/9-shipping-amp-return-strategies-to-know.aspx). Therefore you need to clearly communicate the return policy from the beginning of a session, so the customer knows what to expect. Many companies often put this information on the top of a website. To make the return policy even more attractive for the customers, extend them during holidays or create special campaign offers online. In addition, avoid any confusions and be clear about who is responsible for the returns and costs, if it is the customers, the company or a third part.
There is no reason to fear returns on items bought online to your offline stores. As a wise man once said; Try to see it as an opportunity. Sure, you have the hassle of registering the purchase and return in your systems. However, getting the customer in to your physical store allows you to upsell. ”Sure, we’ll take this item back! What would you like instead?” A good sales person will have the customer leave with more value in the bag than what he came in with. Or at least the customer will have a good feeling, knowing that purchases for your store is risk-free.
If you deny the customers returns to your store, then the only thing you gain is a guaranteed dissatisfaction, and less likely that they will ever purchase from you again.
In conclusion, the delivery strategy and return policies are important parts of the shopping process and directly affects your conversion rate. It should not be seen only as a neccessity at the end of a check out process. It is a service and it should be smooth for the customer without any additional thinking, otherwise companies will loose a high number of sales every year. Choose a strategy that best relates to your products and customers and make the information clear to see on the website to avoid any confusions related to the shipping and return method.
Best of luck!