Originally published on Parcelmonitor.com, 15th November 2021.

The word “free” has a timeless appeal. This is also true of the phrase “free shipping” — at least for anyone who shops online frequently.

Free shipping has consistently been proven to be one of the top purchasing factors among millennials. But how can free shipping influence consumers’ purchase decisions? Is there a correlation between the availability of free shipping and conversion rate of customers?

Read on for the findings of our latest research in partnership with Parcel Monitor !

More Than Half of Shoppers Demand Free Shipping

Free shipping is among the top 3 factors affecting consumers’ decision to purchase online; at the top of the list lies the price of products (80%), followed by free shipping (59%), and then reviews & testimonials provided by fellow shoppers (49%). The same proportion of respondents (54%) admit that they are more likely to return to the same store for repeat purchases if free shipping is offered.

Free Shipping Can Boost Average Order Values of Online Shoppers

It is common for online retailers to set a minimum order to qualify for free shipping. Such a requirement is a great incentive for customers to add more items to their (online) shopping carts, all under the pretense of unlocking more “free” savings. As a matter of fact, 59% of survey participants indicated their willingness to top up their orders in order to meet the minimum amount to be eligible for free shipping.

A Reasonable Delivery Time Is Crucial Even With Free Shipping

Even with free shipping, customers still expect their items to be delivered in a matter of days. When asked what is the longest delivery time that they are willing to accept in order to receive free shipping, only 10% of them answered “more than 2 weeks”. A whopping 90% want their items within 7 days or less.

Should E-Commerce Businesses Offer Free Shipping?

As with any other strategic decision, whether free shipping is a viable tactic depends on a variety of factors. While it is a great way for businesses to gain a competitive edge as well as reduce cart abandonment, it also runs the risk of increasing returns, which may ultimately affect their bottom line. As such, it is crucial for brands to carefully weigh the pros and cons of free shipping before fully committing to it.

Methodology
The survey was conducted in October 2021, with 49,991 respondents from Rakuten Insight proprietary panels in Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam.

Read the full article here.

Related articles: The e-commerce logistics race South East Asia, What do consumers really think about collection points?