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How important is free shipping to e-commerce customers?

March 19, 2014

When consumers decide whether or not to purchase products online, sometimes the most important factor affecting their decision has nothing to do with the product at all.

When consumers decide whether or not to purchase products at an online credit card payment processing page, sometimes the most important factor affecting their decision has nothing to do with the product at all. It has to do with the shipping charges listed at the online payment processing page. 

One recent study, for example, investigated how high shipping costs are preventing online grocery shopping from being adopted by consumers as the new norm in the same way that online retail shopping was. Internet Retailer reported that in a December 2013 study conducted by Etailing Solutions, the company found that more than 50 percent of consumers felt undecided about the prospect of grocery shopping online, specifically because they wish delivery costs would be lower. 

According to the report, only 3 percent of consumers noted that it was a lacking assortment keeping them from shopping online for groceries. In turn, only 6 percent said they were holding out for higher product quality, and only 9 percent said they were holding on for more extensive delivery options. This suggests that the consumers who have yet to begin shopping online aren’t doing so because they don’t like what  products are available, or how they are shipped. Consumers who have yet to adopt e-commerce likely are waiting for lower shipping prices, so online shopping outlets may want to consider whether a decrease in the shipping prices listed at their online credit card payment processing page could help them to attract new consumers. 

Changes made to Amazon Prime further illustrate consumer desire for free shipping
Another example of the importance of low-cost shipping is Amazon Prime. Amazon.com’s loyalty program, which allows members to obtain free two-day shipping on many of their orders, recently saw its initial membership cost increase. This caused an uproar among consumers – illustrating how businesses that fail to offer cost-effective shipping will be forced to face off with a dip in consumer goodwill. 

GeekWire recently reported how the large number of unhappy Prime members – faced with rising costs for their free-shipping privileges – are now even being courted by other retailers. ShopRunner, for example, is currently running a promotion which gives free memberships to Amazon Prime members unhappy with the rising shipping costs. 

“If anyone feels that Amazon isn’t filling your needs, you are welcome to try ShopRunner,” Fiona Dias, the chief strategy officer for ShopRunner, explained to GeekWire. “It is our guess that there is a fairly decent chunk of Amazon Prime members who will decide it’s not for them anymore.”

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