Sep 14 2009
To Free or Not to Free? Your “Free Shipping” Questions Answered!
Free shipping is a vital topic of consideration for most businesses, as it often involves the business itself incurring the associated, and often expensive distribution cost. To help you decide if free shipping offers are right for your organization, Experian CheetahMail has produced a new white paper exploring the issues related to free shipping.
As part of our research for this white paper, we conducted a study posing the following questions to email marketers:
- Are more companies deploying free shipping emails?
On average, about 50% of mailers were offering free shipping in Q1 2009, representing a slight increase from the 48% we saw a year earlier. This percentage rose significantly in the 4th quarter of 2008, with some 60 to 65% of mailers using a free shipping offer for holiday sales.
- Are free shipping emails as effective now as they had been in the past?
Based on free shipping campaigns from 198 mailers, free shipping offers boosted transaction rates (conversion) by 18%, and revenue per email by 31% across all industries, when compared to non-free shipping mailings. - What factors can positively or negatively affect a free shipping promotion?
Free shipping continues to be an extremely effective offer, but free shipping offers do not succeed all of the time. Best practices for free shipping include:- Feature the right product. Free shipping may not be enough to override consumers’ lack of interest in a product, and response may be low. Be sure to identify in-demand products tailored to your audience.
- Keep free shipping promotions short and special. Selective offers to targeted segments for short periods of time had the highest performance. Follow-up reminders with strong calls to action such as “Last day for Free Shipping” or “Final 4 Hours” can be particularly good performers.
- Test a minimum purchase requirement and/or tiered rates for the free shipping offer. Higher minimums had better performance on free shipping emails, enticing customers to spend “just a bit more” to get the free shipping.
- Couple-up with a sale. Sales and clearance emails featuring free shipping tend to be high performers. Use free shipping to deepen the impact of a special sale or ensure strong sales of clearance items.
As consumers become more discerning towards any message they receive, free shipping remains an important tool for many of today’s email marketers. As with any promotion, however, it is important to test if free shipping is right for your specific business needs as well as the needs of your customers, and at what capacity. Remember to consider the best practices mentioned above in addition to factors such as seasonality, product mix, customer behavior, and the timing of other promotions, and you are sure to build a cost-effective and engaging email program to which customers will continually respond.
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Hello,
I am a researcher from eMarketer and I’d like to report on these findings but I was wondering (and thought it might be useful for others) if this study was conducted globally or US only?
Thanks!
Mike Froggatt
Hi Mike,
The study was only among US clients. If you have any questions feel free to reach out to our team, we’d be happy to provide further info as needed.
-Ben