Last weekend, I bought a new bed. The whole process was very smooth; choosing the bed, testing it out, picking the mattress and deciding on the color all went well. That is until I came to pay. I was ready for the cost of the bed but I was hit with a pretty hefty delivery charge. To top it off they could only deliver it on a Tuesday or Thursday between 9am and 5pm. So I had to pay for the inconvenience of getting my bed delivered.
I was not happy at this point, but it got me thinking about delivery charges. Online shopping has become the norm and this comes with delivery charges in one form or the other. If the customer doesn’t pay for it, the retailer does. Does having delivery charges decrease sales and if shipping was free would that increase sales and revenue for retailers?
Delivery charges are a major issue when it comes to online sales and the one thing holding back companies from becoming huge players in the eCommerce realm. Amazon seems to have cracked the problem but they have a lot of things going for them. Things such as scale and immense logistical muscle all help to ensure that it is able to offer free delivery. Now in the minds of customers free delivery has become the default option.
Online retailers have had to up their game in terms of delivery to compete. According to an article in Entrepreneur magazine quoting a study by comScore, “Most online transactions now include free shipping, which is by far the most important online shopping factor among consumers.” A study by Econsultancy, which they also turned into an infographic, showed how 55% of online shoppers will abandon their basket with products in it because of delivery charges.
So what can retailers do about it:
- They do nothing. They let their customers choose them because of quality, good business practices, ethical foundations and excellent customer service
- If they do want to offer free shipping they can just add it into the cost of their products. This will make them more expensive than their competition but they will be able to offer free shipping to their customers
- Finally they can also not add delivery into the cost of their products and just offer it, taking a hit on their profits. This can be offset by selling more but it may affect them in the short term
I personally would have liked to receive free shipping and I honestly wouldn’t have known if it was included in the price of the bed. It would have left me feeling positive about the brand and their products. It might have helped if it was communicated somewhere prior to the final stage before payment. This is also something that online retailers face, somehow being upfront about their delivery policy before people abandon their baskets at checkout. I’m still waiting for my bed to arrive as most retailers wait for a fantastic solution to appear for the delivery charges dilemma.