It’s the $18 billion dollar question. What can I do to prevent cart abandonment? According to the Baymard Institute, on average 67.75% of all online shopping carts are abandoned and this blog post is going to tell you why and how you can prevent cart abandonment.

Shipping costs are the leading reason customers abandon cart

Research by MarketingCharts tells us what customers think about shipping, they don’t like having to pay for it. For 76% of customers, free shipping influences their buy or not buy decision at the checkout. In our post on why your website isn’t converting, we mentioned the importance of being upfront about estimated delivery times too. Well it turns out 53% of consumers want to know when their stuff will arrive. A report by comScore found that 35% of customers won’t even purchase unless they get free shipping. Not surprisingly, research by British firm Adestra found ‘free delivery’ results in 50.7% higher open rates and 135.4% higher click through rates when used in subject lines. Shipping gets talked about. Free shipping accounts for 68% of positive eWOM and 59% of negative eWOM. Your shipping policy is impacting your business.

If you can, offer free shipping…

What are your objectives? Short term you’ll get new customers and increase sales but what about long term profitability? You need to deliver an online customer experience. Build relationships and loyalty that leads to repeat purchases and customers with a higher lifetime value. Offering free shipping is not a competitive advantage, for some it will be necessary to maintaining existing sales. Be better than that. Use free shipping (or a variation on the theme) as part of managing a better customer experience that will drive profitable growth long term.

...On everything

Consider your profit margins. Depending on what you sell and where you ship to, free shipping may not be feasible. Trial it. Given the number of online retailers that offer free shipping if it was not worth it, they wouldn’t do it. Last year during Cyber Monday, the US Retail Federation reported that websites offering free shipping had average orders of $137 versus $91 to those who did not.

...On some things

Some retailers take this approach and offer free shipping on certain items that have higher profit margins. Consider how you will communicate this to the customer.

...At certain times

You can offer free shipping for a limited time period to boost sales. Online retailers often offer free shipping during holidays when competition is more fierce. Let your subscribers, fans and followers know about your shipping offer by emailing, texting, posting, tweeting or pinning for maximum impact.

...To certain places

You may not be able to offer free shipping to all locations you ship to, so make sure you communicate clearly just who does get free shipping so that there are no surprises at the checkout. Omni-channel retailing is the future. Blending mobile, online, brick-and-mortar and social media to create a seamless shopping experience, many retailers offer “free ship to store” for customer pick up. This shipping option offers convenience to customers who want it sooner rather than later and retailers the opportunity to up sell in store.

...On a minimum purchase

Introducing a minimum threshold for free shipping is a strategy to increase the average order size. Consider your products, their size, weight price and average dollar value of an order when deciding on a minimum purchase to qualify for free shipping. If it is too high, customers won’t buy. MarketingCharts found 44% of customers found their order value was not high enough to qualify for free shipping.

If you can’t, offer this instead…

...Free shipping for loyal customers

Reinvigorate your loyalty program (if you don’t have one perhaps you should). Offer free shipping to encourage frequent shopping. Research finds loyal customers spend more too.

...Flat rate shipping

This option encourages larger online sales and customers who spend more do so because they are getting a good deal on shipping. Flat rate shipping does discourage smaller orders so consider your products and price range as 59% of customers have abandoned cart because the shipping cost was too high based on product price.

Final word

The fact is shipping costs impact conversion rates. comScore found 54% of shoppers are abandoning carts because of shipping costs, they want free shipping and another 50% want to know shipping costs at the beginning of the checkout process. The implications here being you need to understand what free shipping costs you and how you can creatively offer shipping in different ways and develop a shipping strategy. Be transparent and state shipping costs and estimated delivery times. Give customers shipping options, including in store pick up. There isn’t a one size fits all for shipping policies. Experiment with the options mentioned in this post and find a shipping policy that fits you. Shopbop tell it like it is.