Why free delivery pays off
We conduct hundreds of focus groups with retail customers every year and this finding is confirmed in locations all over the UK. Shoppers actively seek to buy from websites that offer free delivery and will choose a retailer offering this over another which has delivery charges. Alternatively, if there is an option to Click & Collect from a store or a local shop for free (or for a reduced fee) they will opt for this. If a retailer has a spend threshold to get free delivery consumers will sometimes buy more with the intention of returning some of the items afterwards, whereas others pool their purchases with friends or colleagues for the same reason.
This is because delivery is seeing as a hidden cost that counts against the savings they are achieving by buying online – it’s effectively seen as a loss and, although relatively small, like all losses it comes with psychological pain.
A survey by AlixPartners identified cost of delivery as the second highest reason for abandoning an online shopping cart (36%). Brands should be aware of this and minimise the negative implications of delivery costs as much as possible. The future holds challenges for online retailers as well as bricks and mortar shops – a potential planned digital tax on online shopping and the uncertain economic climate after Brexit (which might introduce customs and import taxes for countries across the European market) could pose some threats and retaining customers might mean getting creative with delivery options.
Talking to your consumers directly can inspire to find solutions to future problems – contact us to find out how we can help.