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How Free Shipping Removes Ecommerce Buying Friction
“Free shipping.” This simple phrase is the familiar siren call enticing shoppers to hit buy with a sense of accomplishment. Last month, Etsy joined the ranks of many online storefronts announcing its plan to make free shipping a core part of the Etsy shopper experience. The online marketplace is inviting its sellers to embrace free shipping by offering optimal SEO positioning within the Etsy site to sellers who ship goods at no additional cost.
Etsy Aims To Drive Sales With Free Shipping
On July 9th, Etsy, a Brooklyn-based online marketplace popular for unique finds, vintage items and one-of-a-kind crafts, announced it would soon provide sellers with the support needed to guarantee free shipping to U.S. customers who spend a minimum of $35. The press release notes that Etsy believes free shipping will empower sellers to connect with more customers by enhancing shopping experiences, encouraging repeat visits to the site’s shops and driving sales. According to Barron’s, Etsy’s stock price increased 4.3% after the announcement.
According to Statista data, 59.9% of Etsy customers in 2018 only made one purchase from the site over a period of 12 months. Etsy’s CEO Josh Silverman said, “We hear that high shipping prices often deter shoppers from completing their purchases. By making free shipping the norm on Etsy, rather than the exception, we'll connect more people with items that they love. Ultimately, we believe this will help increase marketplace conversion and order value.”
Etsy plans to provide tools, support and resources needed to domestic and international sellers that will help them easily set up, maintain and guarantee free shipping for U.S. buyers. The free shipping initiative will be available to Etsy sellers around the globe in September, at which time Etsy will begin marketing the new offer to customers.
Shop ‘Til You Drop Shipping Fees
In order to measure the potential profitability of introducing free shipping to its customers, Etsy ran a limited free-shipping promotion in the spring. According to their July press release, based on Etsy’s data analyzing the performances of the offer, customers spent more per transaction when they purchased items that were eligible for free shipping. Additionally, according to Etsy data, customers were 20% more likely to purchase items that were paired with free shipping offers than those that were not.
Today’s changing retail landscape has online retailers competing for attention and sales. The issue of abandoned shopping carts for many retailers means retailers were successful in attracting customers but could not close deals. Consumers want seamless online shopping experiences, which means websites or apps which allow shoppers to easily find what they need, confirm payment with one touch and, ideally, pay no shipping costs. According to the National Retail Federation’s (NRF) quarterly Consumer View, in 2018, 75% of consumers expected delivery to be free when spending at least $50 for an online purchase. This was up from 68% in 2017. The NRF’s report also noted that 65% of consumers surveyed in 2018 claimed to make purchase decisions based on the presence of free-shipping options and thresholds.
Free Shipping + Prioritized Placements = Win-Win
Etsy is incentivizing sellers who provide free shipping to customers with “priority placement in U.S. search results to items that ship free and to shops that guarantee free shipping to U.S. buyers on orders of $35 or more.” The enhanced SEO positioning within the Etsy platform will enable U.S. shoppers to more easily find items that ship free because they will appear in the top rows of Etsy’s search results. The formula is simple. Etsy offers its sellers free shipping capabilities to intrigue customers to make more Etsy purchases. In turn, Etsy will enhance the search ranking position of shops who offer free shipping which will help more customers easily find them and buy their products. The customers will likely be pleased with the free shipping offer and could be attracted to return to the shop and make future purchases.
From Big Box To Desktop, Top Brands Position The Power Of Free Shipping
Etsy joins a long list of brands who have made strides to lessen friction in the online purchase process. From brick-and-mortar powerhouses like Walmart and Target to online titan Amazon and brands in-between like Zappos, free shipping is becoming a must-have in retail.
- Amazon: Amazon Prime was born in 2005, and with it the ecommerce landscape and shopper expectations were forever changed. At the time of its introduction, Amazon Prime provided paying members free two-day shipping in the U.S. on all eligible purchases. By 2015, Amazon was offering prime members free same-day and one-day shipping and delivery and created a special day for sales which quickly became a world-wide event, Prime Day.
- Zappos: Six years after being acquired by Amazon, in 2016, Zappos.com became one of the first online retailers at the time to offer free expedited shipping on all orders with no membership fees or minimum order values.
- Walmart: In 2017, Walmart launched its offer of free shipping for more than two million items and lowered the threshold for all free-shipping eligibility to a total purchase of $35 compared to the prior $50.
- Target: In 2018, Target introduced free two-day shipping on hundreds of items in addition to its free shipping promotion for all purchases of $50 or more.
Like the retailers noted above, Etsy’s launch of free shipping is an opportunity to set consistent buyer expectations and reduce conversion friction across the online marketplace. Whether for Etsy or any other online retailer, once a customer has a rewarding experience, they are likely to return and possibly spend more. When it comes to the ecommerce experience, keep it seamless.
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