Survey: 68 Percent of E-Commerce Sellers to Offer Free Shipping on More Products in 2011 Holiday Season

November 18th, 2011 Comments off

For e-commerce retailers, the holiday season can often be the most profitable time of the year. Savvy e-commerce sellers are offering more and more promotions to further increase profits and stay competitive, and this year’s Stamps.com survey shows that free shipping promotions can do just that.

In this, our second e-commerce shipping survey, free shipping shows a surge with 68 percent of sellers planning to offer the promotion on more products during the coming 2011 holiday season — a 15 percent increase from the 2010 holiday season. Also, 54 percent of sellers plan to offer free shipping promotions on 50 percent or more of their holiday collection, up from 43 percent in last year’s holiday season.

What’s the benefit of offering free shipping? Of survey respondents, 52 percent said the promotion increases their average revenue per order by $8 or more.

SECOND ANNUAL STAMPS.COM E-COMMERCE SHIPPING SURVEY RESULTS
The survey was conducted from October 31 to November 4, 2011 and was sent to current Stamps.com customers who operate an e-commerce store. Read on to learn more about the significant findings.

E-commerce sellers say free shipping increases average revenue per order
Stamps.com reports that 52 percent of e-commerce sellers who use free shipping as a promotion see their average revenue per order increase by $8 or more.

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E-commerce sellers are offering free shipping on more products in 2011 vs. 2010
Of survey respondents, 68 percent of e-commerce sellers are planning to offer the promotion on more products during the 2011 holiday season, up from 53 percent in last year’s holiday season.

question3 In fact, 54 percent of respondents will be offering free shipping on more than 50 percent of their holiday catalog — an 11 percent increase from the 2010 holiday season.

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Approximately 1 out of 2 customers expect free shipping
Of survey respondents, approximately half find that customers expect free shipping during the holidays.

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The holiday sales rush slows the productivity of shippers
Of survey respondents, 20 percent of e-commerce sellers are able to process and ship orders the same day during the holiday season, displaying a 5 percent decrease from non-holiday periods.

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The free shipping trend hasn’t affected product return policies
Of survey respondents, 66 percent said the customer is 100 percent responsible for shipping costs on returns.

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International markets contribute to profits
Of survey respondents, 82 percent project that at least some of their holiday revenue will come from international purchases, while 11 percent project international sales to account for more than a third of their holiday sales.

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 Why do e-commerce sellers choose not to offer free shipping?

Of survey respondents who are not offering free shipping, 44 percent said they lose money from the promotion, while 11 percent said the promotion does not increase sales.

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Are customers required to reach a minimum order amount to receive free shipping?
Of survey respondents, 51 percent said they do not require customers to reach a minimum order amount, while the remainder was unevenly split between e-commerce sellers who do require it of customers and those who require it on only on select products.

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How Much Do Customers Have to Spend to Get Free Shipping?
Of survey respondents who require a minimum order amount to qualify for free shipping, 55 percent require an average order size of $50 or more.

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Competitiveness plays a small role in free shipping
Of survey respondents, less than half (43%) said their competitors’ free shipping promotions affect when they decide to offer free shipping.

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 Seller’s own websites are king when it comes to holiday sales
Of survey respondents, a seller’s own website is the leading source of online sales during the holidays at 39%.  Second was eBay at 31%, followed by Amazon at 17%. 

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Survey: How the 2011 Shipping Rate Increase Affects Ecommerce

January 7th, 2011 Comments off

This week, the U. S. Postal Service, UPS, and FedEx all raised their shipping rates.  While the USPS raised retail rates by an average of 3.9 percent (3.2 percent for Stamps.com customers), UPS Ground and FedEx Ground both raised their rates by an average of 4.9 percent.  In our latest, survey, we asked customers to tell us how these rate increases would affect their ecommerce program.

Most interesting is the rate at which merchants will be changing carriers due to the rate change; in particular the rate at which merchants claim they will be moving volume to the USPS (likely based on the USPS have the lowest rate increase).  Be sure to check out the rest of the survey questions to find out more about how shipping affects ecommerce merchants.

 

Will Merchants Change Carriers Based on Changing Rates?
Almost half (46 percent) of survey respondents stated these rate increases will influence which mail carrier they will use in 2011.

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Two-thirds of respondents reported that they currently use more than one carrier.

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Of the respondents that use more than one carrier, 50 percent have no intentions to change carriers based on the rate change.  For those that plan to change, the USPS is the carrier merchants are most likely to switch to.

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Switching Costs

While more than half (52 percent) of respondents reported that there is little or no back-end work required to accomodate the rate change, 26 percent of merchants will need to perform at least one day of work due to the rate change.

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In addition to rate change questions, we also asked a number of other questions for ecommerce merchants.  Here are some of the more interesting results:

How Do Ecommerce Merchants Determine Shipping Rates?

When asked how ecommerce merchants price their shipping charges, 44 percent of the respondents stated they utilize destination and/or weight based pricing.  40 percent stated they use flat rate pricing to determine their shipping charges.

While the zone/weight based pricing is generally a more accurate method, it is also much more complicated as it generally requires merchants to populate rate information for hundreds of zone/weight combinations and typically necessitates a system that allows for dynamic rate checks based on what customers have in their cart and what they have entered as a delivery address; to say nothing of the added complexity that more than one distribution center can add.

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Customers Prefer Home Delivery

74 percent of respondents ship at least half of their packages to a home address.

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Although FedEx ($2.50) and UPS ($2.45)  charge residential surcharges, only 12 percent of merchants have different rates for home/business shipments (USPS has no residential surcharges).

How Heavy Are Typical Packages?

83 percent of respondents reported that the majority of their packages weigh three pounds or less.  Only 4 percent typically ship packages over ten pounds.

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This survey was sent to current Stamps.com customers that operate an ecommerce store.  The survey was conducted from December 16-21, 2010.

Click here for more information on the 2011 USPS Rate Change.

Thanks to everyone who participated in the survey!

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

November 10th, 2010 1 comment

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.

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