How shipping costs affect online sales?

Ecommerce continues to grow at a rapid pace domestically in Hong Kong. Customers have expectations for the cost, timeliness, and options of shipping, and those expectations keep growing.

The delivery fee in Hong Kong is comparatively high and sometimes takes up 20% to 50% of the total product price. But how shipping cost actually affect online sales? And how sellers can encourage sales with free shipping fee? To figure this out, I decided to do some research.

Free shipping increases order value

According to a recent Econsultancy survey, 93% of shoppers say free shipping is the biggest source of encouragement to buy more online. More importantly, shoppers spend 30% more when free shipping is available. It follows that if shoppers feel a store treats them well by offering a free promotion they are going to reward that store with more of their business.

Shipping costs cause abandoned carts

According to a study conducted by Usability Sciences, 56% of all shoppers browsed for products, but only 19% placed an item in their cart. The most cited reason for this first level of abandonment was, “I can’t find what I’m looking for.” Of this 19% only 7% of shoppers completed their transaction. The most cited reason for this second level of abandonment was, “the shipping costs and options were unacceptable.”

Clearly, not only do shipping options influence conversion rates, but free shipping also influences the number of items customers put into their carts and the frequency of shopping.

How Long will customers wait for free shipping

Not only will customers abandon a cart if the shipping costs are too high, they’ll also abandon a cart of the shipping takes too long. Even if the cost is free, shipping that takes longer than customers are willing to wait can be a deal breaker.

In a AlexisPartners survey, shoppers were asked the following question: “When buying from an online store, catalog, or television program or commercial, what is the maximum delivery time you are willing to accept in order to receive free shipping?” The results are as follows:

  • One week – 50%
  • 5 days – 24%
  • 4 days – 12%
  • 3 days – 9%
  • 2 days – 4%

The above information indicate that, high shipping cost can stop online purchase. Even though shoppers has put their items into the cart, they will give up the payment at the end, which may cause the decrease of online sales. And most customers are not willing to wait for more than 5 days to get the products.

You may say only the large-scale shopping platform can offer free shipping. However, all Boutir sellers can enjoy free delivery service provided by S.F. Car and E.F Locker with only HK50 per month.

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