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Survey: 64 Percent Say Free Shipping is the Most Effective Promotion

November 10th, 2010

For e-commerce retailers, the holiday shopping season is the most important time of the year. To increase profitability, many are recognizing the value of shipping practices and promotions.

In its latest survey on e-commerce shipping practices, Stamps.com found that 64% of respondents report that free shipping, with or without minimum spend, is the most effective promotion they can offer to drive sales during the holiday season, and 53% will be offering free shipping on more products this year compared to last holiday season. More than half (52%) of the survey respondents who use free shipping with minimum spend report their average order size increases by at least $4.

Free Shipping Is Seen as Most Effective Sales Promotion
According to 64% of the respondents, free shipping—with or without minimum spend—is the most effective promotion an e-commerce merchant can offer to drive sales during the holiday season.  Coming in second place was another shipping-related promotion. 26% of the respondents chose discounted shipping as an effective tool to drive sales.  Note:  survey respondents were allowed to choose multiple answers.

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Merchants to Offer Free Shipping on More Products This Year
More than half (53%) of the merchants surveyed report that they’ll offer free shipping on more items this holiday season than they did during the same period in 2009.

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In fact, 43% of those surveyed will offer free shipping on more than half the items in their product catalog.

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How Much Do Customers Have to Spend to Get Free Shipping?
For merchants who require minimum spends in order to qualify for free shipping, 66% of the respondents required an average order size of $50 or more for consumers to get free shipping.
 

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Free Shipping Increases Average Order Size
When using free shipping with a minimum order amount, e-commerce merchants can expect to see their sales increase. More than half the survey respondents (52%) report that free shipping increases their average order size by at least $4.00. 37% of the respondents claim to see their average order size increased by $7.00 or greater.

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Most Merchants Ship Using Regular Delivery
When offering free shipping, 82% of the respondents send their merchandise using regular 3-5 day delivery.

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Social Media is Being Used for Sales Rather than Customer Service
More respondents are using social media to drive sales to their site (54%) rather than customer retention (43%) or customer support (39%).

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Seller Reputation Is Still King
Although shipping cost and speed are both important factors in driving sales, many merchants believe customers are influenced most by the seller’s reputation.

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International Sales Add Up
The international market appears to be a good method to grow sales for e-commerce merchants.  82% of the respondents project that at least some of their holiday revenue will come from international purchases.  And 10% of respondents anticipate international sales to account for more than a quarter of their holiday sales.

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Low Cost International Shipping Is a Must
Nearly half of the respondents (48%) report that low cost is their main consideration when shipping to international destinations, although package tracking and delivery speed are also important concerns.

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This survey was sent to current Stamps.com customers that operate an e-commerce store.  The survey was conducted from October 21-28, 2010.

  1. November 12th, 2010 at 12:30 | #1

    The above findings are very interesting and tie-in with the findings of a SeeWhy survey, which were released this week.

    The top reasons people abandon shopping carts according to a Forrester Research study can be grouped into two main reasons; price (including the cost of shipping) and the fact that they were not ready to buy. Ecommerce marketers are trying to address the first main issue in a number of ways. Two thirds of the professionals polled plan to minimize abandonment due to shipping costs by either offering free shipping to customers who satisfy a minimum order purchase (which is the most popular tactic with 43% of respondents) and a further 18% have calculated that they can offer free shipping on all orders. More survey results can be found here: http://bit.ly/csef7Z.

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