Ecommerce CX: How much does free shipping influence cart abandonment?

A new survey by ecommerce platform BigCommerce evaluates how consumers’ expectations of free shipping policies influence shopping cart abandonment and store satisfaction.

The survey revealed that nearly 80% of consumer respondents had abandoned a shopping cart because of unsatisfactory shipping options, while 39% of respondents have stopped shopping with an online retailer after a bad shipping experience.

Although it is clear that shipping plays a big role in consumer shopping satisfaction, nearly 50% of merchants respondents didn’t know their online shopping cart abandonment rate, or how their shipping options may be effecting this rate.

Amazon sets a high bar

Amazon dominates online spending in the U.S., accounting for 49%, or $1 trillion, in online retail sales. This effectively enables them to set the rules—and expectations—when it comes to online shipping.

Free 2-day shipping was rolled out to Amazon Prime members in February 2005, a deal that seemed almost too good to be true at the time. But now we’ve all come to expect fast, free (or low cost) shipping from most online retailers—anything less feels like a bad shopping experience.

Last month, Amazon raised the bar even higher by announcing free 1-day shipping for Prime members in the U.S. and they plan to roll this out globally to other markets. This puts even more pressure on small independent retailers to meet consumers’ expectations.

In fact, nearly 70% of merchant respondents in the BigCommerce survey indicated that Amazon’s shipping practices put unfair pressure on independent merchants (and this was before the move to 1-day shipping for Prime members.)

These Since the majority (92%) of merchant respondents handle shipping and fulfillment internally, the move to 1-day shipping will no doubt put added pressure on all retailers to keep up with Amazon or risk losing customers.

Amazon as a distribution channel

BigCommerce notes that over 50% of product searches start at Amazon. This offers the benefit of visibility to small retailers who join the Amazon Marketplace. However, nearly 70% of merchant respondents don’t sell on Amazon due to a variety of factors, the biggest being that they want the ability to own their customer data. The second biggest factor was the inability for a merchant to control their brand.

“Amazon, for all its perceived advantages in offering mass customer visibility, removes your brand element in favor of its own. From the customer perspective, the sale comes from Amazon, not from you.” –BigCommerce

Communicating a retailer’s unique brand extends to the packaging, so merchants who sell on Amazon’s Marketplace must use Amazon-branded boxes. This amount that this matters to consumers depends on their age.

When asked if package branding adds to the customer experience:

• 36% of Gen Z respondents said yes
• 30% of Millennials said yes
• 21% of Gen X said yes
• 11% of Baby Boomers said yes
• 3% of Seniors said yes

But it’s shipping, not branding, that really sways consumers.

Free shipping spurs sales

Fully 84% of global respondents indicated that they had made an online purchase from a retailer specifically because of a free shipping offer.

Half of respondents said they will not even shop with a retailer unless free shipping is available, while 24% of respondents said they would only pay for shipping if there were no other option.

BigCommerce asked consumers what they’d be willing to give up if they could have free shipping on all online orders for a year. The responses were quite telling. Nearly 40% indicated they would give up alcohol or ride-sharing, while 32% would give up their gym membership.

Side note: I really want to meet the people who are willing to give up wifi for an entire year.

It’s shipping, for the win

About 60% of merchant respondents indicated that they offer free shipping to their customers, though not all the time (only 22% offered free shipping on all purchases). Most respondents offer free shipping once consumers hit a certain dollar amount (more than 80% of consumer respondents indicated they’ve added an additional item to their cart in the last 12 months to meet a minimum threshold).

A very small percentage (6%) of merchants indicated that they offer free two-day shipping even though Amazon offers this nearly 100% of the time to Prime members. Remember, this is what consumers have come to expect.

Thus, it’s clear that there’s room for merchants to evaluate their current shipping policies and upgrade their offerings if they want to compete.

Convenience, sustainability, and globalization

The BigCommerce report touches on the impact that all these shipments have on the environment and what companies such as Etsy and Walmart are doing to curb packaging waste.

The report also looks at the opportunities presented to retailers by expanding shipments to a global audience (and what may be preventing retailers from shipping globally).

The full report is available from BigCommerce (free, gated) here.