Is offering free delivery or fast delivery the right choice for your customers?

Customers are being offered free delivery by more and more online retailers.  But is it the draw that you expect?  And are you meeting the expectations of our customers?

There are numerous ways that business offer free delivery, commonly it is given after a certain amount of money is spent.  But some free delivery options mean you are paying a premium for the product.  On eBay, for example, you can often find the same item for varying prices, some with free delivery and others with a delivery charge, if the two are compared their total is usually comparable or one might be pennies cheaper.  So, ultimately the cost is being passed on.

Other companies are going down a delivery membership route, where you pay an annual fixed fee and this covers all your delivery charges, like Amazon with their Amazon Plus service.  eBay have recently introduced a fast shippers scheme in Germany called eBay Plus that follows the same logic.

A broad view should be taken between what competitors offer and what customers actually want.

A number of surveys have been carried out by companies such as Pitney Bowes, Alix Partners and UPS which have lead to interesting results which shouldn’t be overlooked when making delivery decisions for your organisation.

Free Delivery against Fast Deliveries

Needless to say, the results show that free delivery is popular with online shoppers; in fact it is more important to the majority than a fast service.

Consumers have also indicated that they would purchase an extra item if it would mean that they would qualify for free delivery.

Importance of Free Delivery Varies Through Age Ranges

These surveys have shown that, while free deliveries are important its value varies between age groups.  78% of consumers between the ages of 35 and 44 indicated that free shipping is an important part of their decision making process, compared to around half of the responses given in total.

It would seem that free delivery is least important to 18 to 24 year olds.  However, 63% said that free shipping had an influence when making online purchases.

When UPS conducted their survey they found that 83% of those surveyed said they were willing to wait an additional two days in return for free deliveries.

54% of consumers 65 and over were willing to wait a week for their items if their goods were sent for free.  But only 22% of customers between 18 and 24 said they would be willing to do the same.

When it comes to delivery timeframes, indications show that younger shoppers are the most demanding.  In the two youngest age categories (18-24 year olds and 25-34 year olds) 15% said they would expect their delivery to arrive within two days even if they have been given free shipping.  This compares to just 5% of people between the ages of 55 and 64 and 4% of those aged 65 and over, with the same expectations.

It’s fair to say that free shipping is a hit with most shoppers, but knowing the demographic of your customers could be the key to the success of your delivery offerings.  If your target audience is younger, a combination between fast and free delivery seems to be the ticket.  Should your demographic be older, a free service seems to outweigh speed.