(2022) Free Shipping Promotions: How-To, Banner Examples, Announcements, & Discounting Guide
If you're looking for a way to increase sales and conversions for your online store, running a free shipping promotion might be the way to go. Why? Customers don't like paying for shipping, and they hate being surprised by shipping costs once they reach checkout. You don't need to be a marketing expert to guess what kind of effect that has on sales.
In order to be certain that customers won't be disappointed or surprised, it's often easiest to simply offer free shipping in some capacity. In this article, we'll be walking you through the benefits and drawbacks of doing just that, along with some practical tips for setting up and running a free shipping promotion.
4 Benefits Of Free Shipping Promotions
Before we get into how you might go about setting up and running a free shipping promotion, let's briefly cover the pros and cons of the practice.
Note: There are definitely more pros than cons.
1. They're incredibly popular.
Customers prefer free shipping promotions over all other kinds of discounts and deals. It's not even close. One study that supports this assertion found that people react more positively to a free shipping promotion that saves them $6.99 than to a product discount that saves them $10. How wild is that? Despite the fact that the $10 discount ultimately saves them more money, they still feel that free shipping is a better deal.
It's undeniably illogical to prefer a deal that saves you less money over a deal that saves you more. The fact that people do highlights just how much consumers hate paying for shipping. There are two main reasons for this hatred:
Rationalization: When consumers are asked to pay for shipping it becomes harder for them to rationalize online shopping versus in-store shopping.
Value Judgements: Consumers view shipping as a necessary component of online purchases. To consumers, shipping isn't an "extra" service that you're providing. As such, there shouldn't be an "extra" fee (even if everyone is aware that it costs money to ship things). At the same time, they also think that it drives the prices of the cheaper stuff up, which makes sense in cases where the shipping costs are 50% of the price of the item they have just bought.
2. They increase average order values (AOV).
Running a free shipping promotion that's contingent on customers reaching a certain order value is an incredibly effective way to increase your store's AOV. The evidence is pretty compelling.
One study by BigCommerce found that AOV increases by 30% when free shipping is offered. In addition, UPS reports that nearly 60% of customers will add more items to their cart to qualify for a free shipping promotion. These are important statistics that can seriously impact your bottom line!
3. They decrease cart abandonment.
One of the biggest challenges online stores face is cart abandonment. It's estimated that nearly 70% of all shopping carts are abandoned. As it happens, shipping fees are responsible for 25% of these abandoned carts.
In light of that striking statistic, it should come as no surprise that offering free shipping is one of the most effective ways to decrease cart abandonment rates.
4. They increase order frequency.
Another great benefit of running free shipping promotions is that they increase order frequency. In other words, customers are more likely to place repeat orders when free shipping is available. Why is that a good thing? It's simple: existing customers spend 7X more than new customers.
One study found that when free shipping was offered, the number of repeat orders increased by over 20%.
2 Drawbacks Of Free Shipping Promotions
As you can see, there's some pretty compelling evidence to support the assertion that free shipping promotions are an effective way to increase revenue. However, there are two important caveats that you should keep in mind before implementing a free shipping promotion of your own:
1. They can be expensive.
You probably won't be surprised to learn that free shipping doesn't actually mean shipping is free. Someone has to pay for it and that can be costly for online stores. With that being said, there are several ways to protect your margins (more on that later).
2. They increase returns.
Offering free shipping can also lead to an increase in returns. This makes sense when you consider that customers are more likely to take advantage of free shipping promotions if they're not entirely sure about a product.
Summary Of Pros And Cons
- Popular with customers
- Increase AOV
- Decrease cart abandonment
- Increase order frequency
- Can be expensive
- Increase returns
How to Protect Your Margins
When you’re running a free shipping promotion, you need to be mindful of the fact that the money for shipping costs needs to come from somewhere. In reality, there are two possibilities when it comes to who absorbs the cost: you or the customer.
If you decide to absorb the cost of shipping, you need to protect your profit. The best way to do this is by tying free shipping to an order value (OV) threshold, as we discussed above. This means that customers can get Shopify free shipping over a certain amount. By increasing the OVs of customers who shop with you, you'll minimize the impact of the absorbed shipping costs on your bottom line. Common OV thresholds are $25, $50, and $100.
Alternatively, you can pass the cost of shipping on to customers by including it in the cost of the product. While this may seem sneaky, it's really just an accurate representation of what the customer is paying for: a physical product delivered to their doorstep.
How To Set Up A Free Shipping Promotion On Shopify
You can easily set up free shipping minimums in Shopify in the shipping settings. While you’re in the backend, you can even combine free shipping with discounts and other promotions, such as a percentage off for email subscribers or in conjunction with your holiday promotions. Conversely, you can also prevent customers from combining promotions in Shopify.
There are two main ways to set up free shipping promotions in Shopify. Both have advantages and disadvantages, which we'll go over below:
Automatic Free Shipping Discounts
Automatic free shipping discounts apply to every eligible cart. The keyword there is eligible. Not every cart will meet the requirements that you set for the campaign. You get to exercise a ton of control about what kinds of orders get access to the promotion.
- Simplicity: Automatic free shipping discounts are an incredibly simple and elegant solution to the ‘customers hate paying for shipping’ problem. It requires very little effort on the customer’s part—no need to find and remember discount codes!
- Efficiency: This method speeds up the checkout process, which, in turn, leads to more completed checkouts.
- Positive Experience: The above points combine to create a positive customer experience that translates into repeat customers.
- Too Simple: The simplicity of this method can be a double-edged sword. If the process is too invisible, the customer won’t be aware of the value they’re getting from the promotion. It’s important to highlight this value by featuring reminders in prominent places like announcement banners and at checkout.
Free Shipping Discount Code
Another way to set up your Shopify free shipping campaign is with a discount code. Say you’re running a code for free shipping on your first order –– you’d simply set that up in Shopify and be sure to announce it on your website banner. Choose the code you’d like to use, for instance, FIRSTSHIPSFREE, set it up in the backend, and get ready to promote it on your website.
You can also offer free shipping to anyone that makes a large order. For example your can offer free shipping to anyone spending over $30. Take a look at shopify free shipping over certain amount.
- Easy Setup: Setting up discount codes is incredibly easy with Shopify. This makes them great for Shopify beginners.
- Easy Analysis: Using a discount code system makes it easy to segment and analyze the promotion to help determine its efficacy.
- Not Seamless: The main disadvantage of the discount code system is that it requires effort on the part of the customer when it comes to finding and remembering the code. Generally, the less effort the better. With that being said, announcement banners offer a partial solution to this problem by making sure customers are aware of the code at all times.
How To Promote A Free Shipping Promotion
Once you've set up your free shipping promotion, you'll need to get the word out about it. Newclick offers marketers several easy and effective ways to get customers the information they need.
Create An Announcement Banner
Announcement banners are graphic headers that sit at the top of your website and pass important information on to visitors. While they have plenty of uses, one of their most common is announcing free shipping promotions. Free shipping announcement banners make powerful objection handling tools because of how quickly they transmit positive information to visitors.
Announcement banners pair well with a wide variety of free shipping campaigns due to the versatility of their content and behavior. Let's look at a few free shipping announcement banner examples:
Blanket Promotions: This is a free shipping announcement banner example that applies to all orders, regardless of value or eventual destination. For this kind of promotion, it's enough to simply advertise the service you're providing to customers.
OV Threshold Promotions: We briefly covered this free shipping announcement banner example earlier. To recap, this kind of promotion makes free shipping the reward for reaching a certain OV threshold. Announcement banners for this kind of promotion can either display the required threshold as static text or as dynamic text that is updated when items are added to the cart.
Discount Code Promotions: Again, we covered this kind of free shipping announcement banner example. It's extremely simple, you offer your customers a code that unlocks free shipping when applied at checkout. In your announcement banner, you simply need to feature the code along with some indication that it unlocks free shipping.
How To Set Up A Free Shipping Announcement Banner
Luckily, you don't have to worry about hiring a designer or writing code anymore. You simply have to download the free and easy-to-use Shopify app from Newclick.
The user-friendly Newclick app allows you to create and schedule promotional announcements on your Shopify store in minutes. You'll schedule a start and end date for your free shipping promotion banner that aligns with the dates you're running the promotion itself.
With only a few clicks, you're able to customize your banners with Newclick's editor. You can change anything from the background and text color to adding emojis, links, and more. The result is a banner that seamlessly integrates into your website, matches your brand identity, and helps drive sales.
Create A Pop-Up
No matter how you spin it, pop-up content is one of the most controversial ways to interact with your website's audience. Regardless, it remains one of the most effective ways of grabbing people's attention. If you're considering a free shipping promotion, a customized pop-up can be a great way to inform your customers.
How To Set Up A Free Shipping Pop-Up
With Newclick's Shopify app, you can easily create customizable pop-ups that bring information directly to your customers. You can change anything and everything about them so they mesh with your website content and while getting the message across.
When trying to run a free shipping promotion, make the announcement stand out with eye-catching elements and compelling copy. If you're having trouble with the latter, Newclick has your back with it's AI-powered copywriter.
As with any discount or offer, you should choose a goal for your free shipping campaign. Start small, measure results, and adjust course based on your findings. To help guide you, here are a few questions to ask yourself about the promotion:
- Did your free shipping discount convert more visitors?
- What was the average order value?
- How did your margins look after absorbing shipping costs?
- How are you promoting your discounts?
- How do you create design elements for your campaigns?
- How much time and money are spent creating them?
Asking these types of questions will allow you best to develop a marketing strategy for any future campaigns. If you’re ready to start creating promotions that are easy to run, look sharp, and increase conversions, it’s time to set up your free account with newclick.io.