How e-commerce shipping affects your online store's conversion rate

How e-commerce shipping affects your online store's conversion rate
parcelLab
parcelLab
Sat, 03/02/2019
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When it comes to improving the conversion rate, people often talk about A/B tests on the website and website optimization in general. In this context, abandonments in the buying process are also often mentioned and how they can be avoided. An example of this is the processing of the checkout process, which often has a high optimization potential. For example, one study shows that reducing the number of fields to be filled in can reduce the number of purchase cancellations by more than 25%.

Conversion Rate Optimization through Attractive Shipping Conditions

An often neglected and rarely mentioned aspect, is the shipping of orders. This despite the fact that 60% of online shoppers emphasize that they make their purchase decision on the Internet based on the available shipping options and their convenience.

For this reason, the e-commerce shipping strategy is important for your long-term success on the Internet: which shipping service provider do you or your fulfillment service provider use and which services are included?

The key factor to convince consumers to buy from your online store is fast and free delivery. According to statistics, more than 54% of online shoppers leave the shopping cart without making a purchase because shipping costs are charged. This is supported by a survey that states that 83% of US online shoppers consider free shipping as the most important factor when shopping.

The importance of free delivery is also illustrated by the example of Amazon Prime: Prime customers convert 74% of the time compared to 13% of non-Prime customers.

Image Amazon can score with free deliveries for Prime customers.

The importance of e-commerce delivery time for consumers

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In recent years, short delivery times have gained importance in parcel shipping. Everyone knows it: as soon as you place an order in an online store, the endless anticipation for the product begins, which also causes symptoms such as impatience. 54% of consumers state that fast delivery is considered the most important deciding factor in shipping.

Currently, however, 90% of online shoppers say that free package shipping is more important than speedy delivery. This is likely to change somewhat in the next few years, now that Millenials have ever-increasing purchasing power and this generation places a lot of importance on fast delivery.

Image Millenials have ever-increasing purchasing power.

This trend clearly shows how customer expectations are evolving in terms of e-commerce shipping. Amazon & Co nowadays offer delivery within 1-2 days with just a few clicks. SMBs need to adapt to these high demands to remain competitive and improve the conversion rate of their online store. If they don't, they will lose customers to these online giants.
The following statistics support the growing importance of fast package delivery for the success of the online store and its positive impact on the conversion rate:

  • 64% of Millennials are more likely to shop online when same-day delivery is an option. Just recently, Amazon further expanded its Same-Day Delivery service to meet the needs of young shoppers.
  • 88% of consumersare willing to pay for a faster shipping option.
  • For last-minute shoppers, the likelihood of making a gift purchase increases by 78% when same-day delivery is made available. With this knowledge, you can successfully increase your conversion rate, especially during the Christmas season.

Putting the customer experience in the foreground

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Not only a fast delivery, but more importantly a smooth delivery is crucial for the customer in the customer journey. Studies have shown that 38% of customers are reluctant to order from an online store after they have already had a negative experience in the shipping process. Since returning website visitors show a higher conversion rate, this has a negative impact on them.

What does this mean for your online store? Become aware that the shipping process plays a crucial role for the customer and you should therefore make it as pleasant as possible.

The importance of return shipping

Generous return policies play a paramount role in the purchase decision. 51% of shoppers say they would avoid buying from an online store with unattractive return policies. Especially in the fashion sector, the posted rules for return shipping influence the conversion rate to a strong extent.

The Journal of Marketing published an article showing that free return shipping leads to a 365% increase in online purchases. Interestingly, the study also reveals that extending deadlines for return shipping has a negative impact on the return rate. The reason for this is that customers are less stressed and probably forget to return products over time.

Image Customer-friendly return conditions will become increasingly important in the future.

Transparency from the online retailer

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Another point to consider with regard to shipping conditions is transparent communication. The importance is highlighted by a study showing that 56% of online shoppers abandon their shopping cart because they are confronted with unexpected costs in the checkout process. It is striking that just 22% of online stores display information relating to shipping conditions on their website.

###See shipping messages in action!

Conclusion

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As you can see, you have the opportunity to optimize the conversion rate of your online store through better shipping options and conditions. Optimally, you offer the customer multiple shipping options to address the heterogeneous customer needs or different buying situations.

The free shipping is nowadays almost inevitable and therefore the costs must be included in the sales price.
For urgent transactions and last-minute buyers, it is recommended to offer express delivery for an additional charge.

Last but not least, one must not lose sight of the shipping and return conditions and their convenience factor for the customer and rely on transparent communication to strengthen trust in the brand.

This was a guest post by byrd

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parcelLab

parcelLab

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