How Shipping Can Make — Or Break — An Online Sale

New research from the National Retail Federation shows most consumers expect free shipping after spending $50, and they're likely to back out of checkout if they don't get it. Here's what lighting and home furnishings retailers need to know.

Alison Martin
02/27/2018
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Shipping truck rushing to deliver

You can thank Amazon for setting consumer shipping expectations. For those enrolled in Amazon Prime, free shipping — free two-day shipping to be more specific — is the norm, and while that's not true for all consumers, research from the National Retail Federation (NRF) shows that shipping certainly factors into online purchases.

Here's what lighting or home furnishings showrooms needs to know about consumer's shipping expectations.

High shipping minimums drive consumers away

The 2018 State of Retail from NRF found that free shipping matters to consumers, and it can even make them back out of a sale.

- 47 percent of consumers surveyed said they would back out of a purchase if they didn't qualify for free shipping.

- 51 percent said they would add an additional item to meet that limit.

- 68 percent of consumers expect free shipping at any price point. Only 20 percent expect it after spending $50-99, 7 percent at $100-150 and 6 percent at above $150.

Those are some tough expectations on shipping. The NRF further broke down that 68 percent by demographics — Gen. Z, Millennials, Gen. X and Baby Boomers — and looks at the total of respondents from each demographic that answered with free shipping at any price point. A whopping 77 percent of Baby Boomer responders said they expected free shipping at any price point, and 67 percent of Gen. X agreed. If you're targeting consumers ages 35 and over, then you could be chasing them away if your shipping minimum is too high.

In the future, two-day shipping may be the expectation. Right now, only 38 percent of consumers expect free two-day shipping. Furniture showrooms, especially ones that do custom orders, probably won't ever have to worry about this, but if your showroom sells accessories and small table lamps, you may want to consider two-day shipping in the future. It might give you an edge over your competitors. 

Knowing your shipping limits

Every lighting and home furnishings showroom is different. Maybe you sell light bulbs, small decorative accessories and other products that consumers can easily add to their carts to hit a $50-minimum. Maybe you don't. With shipping, it's okay to experiment a little to determine what works best for your business online.

Depending on what you sell online and how much you sell, consider offering free shipping at $50. Most consumers are more understanding of small businesses, and if most of your merchandise hovers around or is above $50 anyway, then this should be an easy minimum to meet. Take a hard look at how large your online orders tend to be and how many consumers have left items in their carts. If you're seeing a lot of orders around $35, then you're in a pretty good position to convince shoppers to spend that extra money to reach the free-shipping minimum. 

If you're seeing a lot of customers abandon their carts with $30 or less worth of merchandise, then you may want to consider lowering your free-shipping minimum to $35.

Now think back to your own experiences shopping online. Have you ever gone to a site specifically for a product and then realized you need to spend a little more to get free shipping? Most consumers, as NRF's research showed, don't mind doing this so long as they can find something that won't force them to spend too much over that free-shipping minimum and what they find is useful to them. Small $10-items can help consumers reach those minimums.

Tell us: what about shipping is most difficult in your showroom? Share with us in the comments!

 

Photo: Sean JOHNSTON from Pexels

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