The Dreaded Shipping Charge
You know online stores offer free shipping, but did you know that it’s quickly becoming the standard? Nearly half of successful internet retailers offer free domestic shipping. A recent survey asked consumers what hurdles were keeping them from buying. 38% of all users stated their main cause for pain was the shipping rate, with 93% polled stating free shipping would lead to a purchase.
This standard doesn’t always crossover to International eCommerce. A popular Brand-name retailer offers free shipping on all domestic orders, but for international orders their policy is the exact opposite. They currently use a GELP (Global eCommerce Logistics and Payments) takes a cut of their international profits, offers no free returns, and no free shipping. Using the GELP is like giving away your international clients. The GELP decides what your shipping rates are and they set your profit margins.
Free International Shipping
Free international shipping isn’t impossible. Research your market and add a reasonable increase to your product prices to include international shipping. Even if your products are more expensive than your competitors, offering free international shipping will increase your conversions. Data shows that consumers will buy more product from you as long as you offer free shipping. The reason is, they would rather spend $50 on additional merchandise than what they perceive is a wasted fee. Most retailers starting out with free shipping combine higher product cost with a minimum purchase amount.
Let’s do some math!
Jayne has priced his hats to sell internationally for €25 EU, with a €5 EU markup for shipping costs. His international shipping rate for one box is €15 EU. How many hats does Jayne need to sell to cover his cost for international shipping? Just three! His competitor might offer similar hats at €20, but Jayne’s customer receives greater value and Jayne ships more product. To make sure he stays profitable, Jayne can require a minimum purchase of three hats for free shipping. Shiny!
Research backs this strategy up:
- Consumers are 5 times more likely to purchase a higher price with free shipping
- Unexpected shipping costs lead to 28% more abandoned carts
- 73% of online shoppers noted unconditional free shipping as “critical” to a purchase
It may take you some time before you can be like Jayne, so let’s go over some tactics you can implement when free shipping isn’t an option.
In The Art Of Choosing, Sheena Iyengar noticed that consumers are more likely to convert to a sale when their choices are limited. In her example, customers encountered a table of jam samples. Each day the table alternated between thirty sample flavors or only six. Each customer who sampled the jam received a coupon for $1 off their purchase.
Professor Iyengar’s data showed an identical interaction from consumers, meaning one out of three customers sampled jam and got a coupon, but when it came to conversion, the numbers varied drastically. Customers who sampled from the table with fewer options were six times more likely to purchase jam.
She found that too much choice can be a bad thing.
When your customers are checking out, make sure you keep their options simple and streamlined. Keep your checkout on one webpage so your customer can see the finish line. Don’t make them go through several screens of options for address fields, payment information, and shipping. This also helps your customers with slow internet access, when they only load one page, they won’t get frustrated and abandon their carts.
Small Numbers First
One of our clients used to offer their international customers one shipping option. It was the expedited shipping and, as the default shipping option, shocked their customers with the final checkout price. This led to hundreds of abandoned carts.
It all turned around when they installed iGlobal Stores’ software and the merchant changed the default shipping method to the much cheaper, and much slower, shipping option. Their conversion rate jumped over 400% but most interestingly, consumers chose the more expensive shipping option 36% more often.
International consumers understand they will face shipping charges, as well as duties and taxes, but when you give them linear choices, then the consumer isn’t overwhelmed and doesn’t abandon their cart in a panic. Consumers can, and often do, choose to increase their shipping costs or prepay duties and taxes. They have the choice between convenience and price.
iGlobal stores has helped hundreds of internet retailers increase their conversions through these and other tactics. Read more about 3 Reasons International Customers Aren’t Converting.