Free Shipping Russian Roulette

Free shipping is a big deal; something that shoppers love and retailers hate.  What if we could limit the number of free shipping items and make shopping exciting? A site visitor is browsing your inventory and while on a product page gets a message that says “We give out 5 free shipping coupons every single day and you’ve been randomly selected for free shipping with this item.”  Two things happened here, one the customer got a powerful incentive to buy and two, the site experience suddenly became more memorable, increasing chances that this customer would remember your store url.  Do you think this is a good idea? Or are we changing customer behavior and incentivizing them to not buy until they’ve been randomly selected?

6 thoughts on “Free Shipping Russian Roulette

  1. I believe that free shipping has been hyped too much. Let me give an example:- there are two sites A & B selling the same product with the same cost structures.

    Now A sells it at a discount of 10% with free shipping and B sells it at a discount of 15% but charges shipping, which is added to the order total in the cart.

    Vendor Perspective:-
    Both are making the same profits for the same product (again assuming 5% equals the cost of shipping). So what is the problem with free shipping – free returns yes, but why free deliveries?
    Anything else – meeting price points and discounts will distort the profit margins, and whosoever has lower costs will win.

    Customer Perspective:-
    In both cases, the customer ends up paying the same. Yet he might love site A simply because he pays what he sees on the product page. No ambiguous charges added to the cart. If I go to site B and see wow! 15% discount compared to 10% on A, I add to the cart and then see the shipping charge, I would be highly disappointed.

  2. A rational customer would think like you but there is plenty of empirical data that shows free shipping does improve conversions.  Does this strategy lead to sustained growth? I’m not sure.

    • Free shipping is just a lure. I have seen people mention it on twitter, facebook – “… and they offer free shipping too 😀 :D”

      As I said, I like to see the price upfront and not have to calculate how much more I have to pay when I add to the cart unless its discounts. But then discounts also should be calculated and final price shown there itself.

      There have been a lot of instances where I abandoned the shopping cart when I saw the shipping charges.

      Sustained growth?? From a vendor’s point of view, isn’t it the same margins unless he also gives the same amount of discounts but with free shipping?

      • I agree with your view.

        “Sustained growth?? From a vendor’s point of view, isn’t it the same margins”

        Yes, the two vendors might make the same margin but the vendor with free shipping might have a better conversion rate.  Same margin + better conversion rate = greater revenue.

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