Should you offer “FREE SHIPPING” on all e-commerce orders? Maybe, but it is clearly up for debate and an important financial considerations. At Accorin we have found that free shipping promotions and free shipping A/B tests typically have higher conversion rates and average basket sizes than offers that do not include free shipping. It stands to reason. Everybody wants something for free (or perceived to be free).
There is a lot of e-commerce industry data that confirms our observations and findings:
- 71 percent of shoppers more likely to shop from online retailers who offer free shipping; 56 percent more likely to shop online retailers offering free returns. Deloitte Annual Holiday Survey
- Two in five (38%) [shoppers] were influenced by the offer for free ground shipping Smarter Strategies For Free Shipping by Forrester
- One in four (27%) shoppers were influenced by free return shipping Smarter Strategies For Free Shipping by Forrester
What we have also found, is that B2B e-commerce customers do not necessarily have the same expectations on shipping costs, returns and other “logistics” requirements. “Free” in B2B e-commerce can have very different expectations and implications compared to B2C e-commerce. A good example of expectations can be seen in the new Parts Express site.
In B2B e-commerce, purchasing is being done as part of job, versus in B2C where purchasing is a personal activity. Expectations on efficiency, repeat ordering, standardized billing and shipping requirements are different. For B2B, “free shipping” considerations include:
- Many B2B organizations have their own negotiated shipping rates, that for large organizations are extremely cost competitive. Where they are, the customer wants the lowest product price so they can use their own shipping information. Buyers understand that “free shipping” isn’t really free. It is just included in the product price.
- B2B e-commerce orders can be bulk orders that require unique shipping and logistics requirements (i.e. loading docks, delivery windows, etc.)
- B2B e-commerce orders may be time sensitive and needed for a key business activity (e.g. causing a manufacturing or service interruption). In these situations, shipping costs become less of a factor.
The Bottom Line
The implications of shipping, returns and fulfillment are significant for B2B e-commerce sites and must be carefully considered. A B2C e-commerce perspective can be a starting point, but B2B e-commerce requires unique Mechanics and Money considerations. The customers are different so the offerings must be different as well.