Comments on: Do Women Respond to “Free Shipping” More Than Men?

By: Garmisch

Garmisch — Sun, 11 Oct 2009 14:59:53 +0000

That’s a really interesting question. In the first moment I think we have both: male and female in the same arrangement in our shop systems. So I think here in germany it doesn’t matter.

By: Bloggers Digest 6/27/08 | Get Elastic

Bloggers Digest 6/27/08 | Get Elastic — Sat, 19 Sep 2009 18:38:10 +0000

[...] Does “free shipping” attract more females than males? Interesting article from GrokDotCom’s Holly Buchanan. [...]

By: Irene Savoia

Irene Savoia — Thu, 25 Jun 2009 02:54:35 +0000

I have abandoned an online sale.The price of the dress that I planned to buy is $160 while the shipping fee is $30.It costs much to ship.However my boyfriend was not so sensitive as me.

By: Art Jewelry

Art Jewelry — Sun, 22 Mar 2009 02:58:27 +0000

We recently changed our site to free shipping for all orders. No limits, no minimums. Haven’t seen any increase in sales or decrease in cart abandonments but the state of the economy can’t be helping.

By: Steve

Steve — Thu, 05 Feb 2009 13:53:15 +0000

I try to find out the shipping charges before I start shopping on a company’s website. I don’t see a point in finding something I like only to them be charged a ridiculous shipping charge.

About 4 years ago, I became an Amazon Prime member so I can have 2nd day shipping at no cost (other than the $81 prime membership fee). I think I make money off the Prime membership by no longer buying additional items (that I really didn’t want) to get to a free shipping. Although, I did get in trouble with my wife when the UPS lady told my wife how great it was that I was keeping her job safe!

By: Holly Buchanan

Holly Buchanan — Wed, 07 Jan 2009 16:03:24 +0000

Great discussion Rob and Keith.

On the business side, it really is about crunching the numbers to see which model makes the most sense for your business. (free shipping and raising prices vs. low price plus shipping cost).

From a consumer point of view – as Sean said, it’s psychological.

For women, I suspect that they are more sensitive to beeing “fleeced” and to getting a “bait and switch” where they get offered a low price, but then you hit them with a high shipping cost. (high being their perception, even if it is an acutal reasonable cost)

I think it’s more of a feeling that “the company was not transparent with me” From a logical point of view, if the total price is still lower than what you can get elsewhere, that should be a win win. (which apparently the guys get) But I suspect she’s feeling a loss of trust. It has become a trust issue vs. a price issue at this point.

Many people simply are not well versed in what it actually costs to ship items. so it’s a perception battle you’re fighting.

I’d love to hear more from you about your approaches and what you’re finding is working or not working.

thanks so much for sharing your insights!

By: Keith W.

Keith W. — Tue, 06 Jan 2009 17:55:46 +0000

Rob, what kind of shipping service are you using allowing you to compete with the free shipping. the $6 minium plus house delivery charges plus rural address fees on fedex makes this nearly impossible for such inexpensive items as you are mentioning unless you are doing huge volumes. Are you using US Postal service media mail, or other? If so how long does it take to arrive to your customers and how heavy are the average items you are shipping for free?

By: Rob

Rob — Mon, 05 Jan 2009 22:51:13 +0000

Thanks for the feedback on charging a nominal fee (similar to charging a “restocking” fee). On price competition, one fear I have is losing the ability to compete on item price as this has been one of our big pitches thus far. To date, for about 90% of our items we’ve always tried to be the lowest price we could find in the comparison tools. By opting to offer free shipping (necessitating an increase in item price) we’re going to be moving away from this model of competing on item price (particularly for items valued under $10 and $5). So bottom line there, is the migration to free shipping is going to move us away from competing on price per item, but hopefully still keep us competitive on total order size.

All this being said, one of the reasons we’re moving to “free” shipping, is that we want to start encouraging people to place larger orders as the level of effort associated with packing a $60 order is usually not 3x as high as packing a $20 order. Likewise, customer service that requires a human reply doesn’t scale well, so if we’re going to spend time with call center staff replying to customer emails, then we’d rather be doing it over $60 orders with 12% margins, than $20 orders with 15% margins. So we’re hoping that Free Shipping will be method to increase order size, and increase purchasing power with suppliers.

Lastly, we’re hoping to look a bit more professional with a “free shipping over $50″ policy. Our impression, true or not, is that it’s usually the bigger operations that offer free shipping since they often have multiple distribution centers, bigger shipping discounts, etc. that make it reasonable for them to present themselves like this.

I know I’m asking for perhaps too much out of “free shipping”, but you have to start somewhere I suppose.

By: Keith W.

Keith W. — Mon, 05 Jan 2009 18:18:52 +0000

In regards to items shipped with free shipping and returned we charge them a nominal return fee of around $6.95-9.95 for the returned item dependant upon the weight. Its just enough to cover our shipping costs but we still eat the packaging (boxes, peanuts, etc.), employee time cost, and other minor costs. It seems to go over ok most of the time as people realize there are costs involved to the company regardless of it they keep it or not but every now and then we get a customer who is unhappy thinking returns must be free even though it is clearly posted on our shipping page that a return shipping charge will be added to items shipped with free shipping.

Free shipping really is just a lose, lose situation for retailers in my opinion. It’s kind of like another form of price wars, which anyone who has taken any type of business course realizes competing on price solely cannot be substained, it is the number one no no of marketing and business. Free shipping is great for generating quick sales for those customers on the edge of buying the item but you really cannot win if they decide to return it. It would be interesting to know if customers with free shipping on their order have a higher return rate because they are sometimes less committed in the first place?

By: Rob

Rob — Mon, 05 Jan 2009 18:02:32 +0000

By the way, another issue with free shipping that would be interesting to discuss is “How do you handle returns when you sold the item with free shipping.” The customer will almost certainly expect to be refunded the total cost of the order since the shipping was “free” after all, right? We are thinking of charging a %10 restocking fee. Bottom line is that like it or not shipping charges are built into the order total even if not done explicitly. We’re also interested in knowing how people are approaching these types of site conversions to offering FREE SHIPPING (from charging for shipping).

By: Rob

Rob — Mon, 05 Jan 2009 17:57:33 +0000

Here’s one – we have about 200 SKUs on Amazon. Due to varying weights/prices/sizes already discussed we have a table based shipping rate schedule that increases as the cost increases, and we price our items accordingly. Over the past year we’ve refined it to the point where it’s quite accurate for our particular types of inventory. One of our more popular items is only $18, but has an $12 shipping charge due. Over time, we’ve had more than several comments about shipping being so expensive relative to the cost of the item. By FAR these comments have come from our female customers. In fact, we’ve even had 2 female customers cancel their order when they realized the shipping for this item was 2/3 of the item cost. The irony, however, is that for this particular item the *TOTAL* price (item + shipping charge) is BY FAR cheaper than almost any other store on the web and even matches the cost of buying the item in many bricks and motar outlets. When we point this out in as diplomatic a manner as possible, this has never changed a female’s perception of the shipping charges being unwarrented. By contrast, the two men who at first complained, changed their minds when they reevaluated the *total* price. So, in conclusion the topic of this article is in line with our experiences as well.

All this being said, we are sensitive to this issue as we want to appeal to all customers. We are currently in the process of transitioning our own site (not our Amazon listings) over to FREE SHIPPING OVER $50. I’d be interested in seeing a discussion on the challenges of doing this. We’re finding that it’s great for more expensive items (we just reprice and build the shipping cost in), but that for the cheaper items we need to raise the price so the items when ordered in volume will still cover shipping costs. The challenge here though is to not price the item so high that you’ll completely discourage people from buying quantities below $50. In any case, I’d be interested in seeing some discussion and blog posts surrounding the challenges of re-pricing your inventory (cheap and expensive, light and heavy, big and small) to make free shipping feasible. The bottom line for us is that we (nor do we believe anyone else) will actually *eat* shipping charges. Instead our believe is that the shipping charges are simply built into the price. So if you go from being a site that charges for shipping to a site that provides free shipping, then repricing is almost a necessity (unless your product is jewelry or something similar with a high margin and low weight where you actually *can* eat the shipping).

By: Mr Landlord

Mr Landlord — Sun, 28 Dec 2008 02:55:42 +0000

Your question (Have you ever abandoned an online sale because you perceived the shipping costs to be too high?)

My answer: Most certainly. I don’t mind paying a fair shipping rate. We ship things daily out of one of my companies, and I know the general costs of shipping. If I order something and the s/h seems unreasonably high I will refuse to do business with the site because I believe they are trying to pull a fast one on their customers by soaking them on the shipping cost.

I never mind paying a reasonable shipping rate so long as I’m getting it for less online than I would at freddies, etc. It is always a pleasant surprise to get a good price on a product and free shipping though.

By: Ellen Hart

Ellen Hart — Tue, 12 Aug 2008 17:41:10 +0000

This is an interesting question that I’ve struggled with for my online business. The reality is that if your competitors are offering free shipping, you almost have no choice but to do the same. However, many businesses claim to offer free shipping, but actually roll the cost into the price of their product, unbeknownst to their consumers. As a business owner, it’s a tough balance between offering a fair price to your customers, a great service, and earning a profit in spite of rising fuel prices.

By: Susan Greene

Susan Greene — Sun, 13 Jul 2008 17:48:06 +0000

I definitely factor shipping costs into the purchase decision. The other “extra” is whether or not I’ll be charged sales tax. I would think most consumers are smart shoppers these days and know to tally up the product price, shipping and sales tax to arrive at a final figure that they can compare to other online and offline retailers.

By: Keith

Keith — Tue, 08 Jul 2008 20:23:56 +0000

We used to offer free shipping, but stopped as it was a huge cost even with a minimum order threshold. From our experience we offered the free shipping which the site defaulted to and let them know it would take a couple of extra days and I’d say 15%-20% that qualified for free shipping would actually chose to pay for regular 3-5 day shipping to get it a couple of days quicker.

By: Thomas Pletsers

Thomas Pletsers — Tue, 08 Jul 2008 19:00:19 +0000

What about speed, how important is speed to the customer?

Get Free shipping and have to wait a week to get it, or pay a little and get it in 2 days.

Any insights.

By: Thomas Pletsers

Thomas Pletsers — Tue, 08 Jul 2008 18:58:42 +0000

We offer Free Shipping on orders over $55, and bigger discounts on express shipping when you buy more.

All our competitors have: the more you buy the more you pay on shipping. Ridiculous if you ask me. With higher profits you can offer better discounts.

We look at it that we like to reward a good customer with cheaper shipping, so the more you buy the lower the shipping.

Make sense to us

By: KeeKee

KeeKee — Sat, 05 Jul 2008 22:18:03 +0000

With gas and every single thing else going higher and higher, you better believe if I can get it on the internet with free shipping, I figure that’s just one more way I’m saving a penny here and there because that’s about all any of us can save anymore. I have plenty of male friends that will jump on free shipping too. So I really don’t think it has anything to do with being focused towards male or female. But that’s my opinion.

By: Bryan Eisenberg

Bryan Eisenberg — Fri, 04 Jul 2008 19:04:49 +0000

In our 2007 Retail Customer Focus study 40% of the retailers (over 370 of the Internet Retailer 500) offered free shipping. It will be interesting to see where that number comes out this year.

By: Yvonne DiVita

Yvonne DiVita — Fri, 04 Jul 2008 18:41:45 +0000

Holly, I was asked this question just recently while in a networking group of professional women. They asked what I thought would happen to free shipping in light of rising gas prices. I have not done my research yet, so all I could say was…if retailers online give up on free shipping, they will likely see a drop in sales from their women customers. We’ve come to enjoy the free shipping and women I talk to actually say they recognize that sometimes that shipping cost is buried in the product price. They don’t care. Free shipping makes them feel good. To Sean’s point…it’s psychology.

By: Keith

Keith — Tue, 01 Jul 2008 00:14:12 +0000

Nice point Sean, you’re right it is definitely not logically, logically we would all want it broken down so we could see where every dollar of the expense went to, not hidden in the price of the item. It is psychology that is why the amazon.com strategy works for them so well with the free shipping. However I would say they are a volume business, so it makes sense for them to give away shipping because they might only make a tiny on each sale like wal-mart but a tiny times 10 different sales to the same consumer is a lot. A great strategy but not for every store…. Not to mention they’ve got to have killer deals with the carriers due to the shear volume of shipments they make, which doesn’t hurt either!

By: Shannon

Shannon — Mon, 30 Jun 2008 23:27:45 +0000

Keith, maybe I didn’t explain it correctly. The site charges $X for purchases totalling $1 to $100; they charge $XX for purchases totalling $101 – $200; and so on. It doesn’t matter what the items actually weigh. So in theory (and practice) this company can and has charged me more to ship one light-weight but expensive item than three heavy-weight but cheap items. There’s no logic (or psychology). They’re just doing something that’s convenient for them and annoying to me.

By: Sean

Sean — Mon, 30 Jun 2008 21:16:07 +0000

Keith,
You’re not dealing with shipping. You’re dealing with psychology. If for instance, we have a workshop, and the workshop is $2000, then the customer will spend $500-800 as travel/hotel costs. If however, the workshop is $1000 or lower, the customer may not turn up. If the workshop is free–and worth $2000–then the customer still won’t turn up. This is because the additional cost can’t be equal to or above the product/service cost, even when the value of the product/service is more than apparent.

It’s not a logic issue.
It’s a psychological issue.

Sean
http://www.psychotactics.com/blog

By: Keith

Keith — Mon, 30 Jun 2008 20:24:45 +0000

Shannon,
You might be surprised to know many customers just don’t get it that heavier items cost more to ship unless it weighs dramatically more like a fridge. We charge by the weight of the item and I we receive emails from time to time saying the exact opposite. For instance if they order an item that weighs 10 pounds but is only $30 they think it should be cheaper to ship than an item that costs $75 and only weighs 4 pounds even though we tell them the shipping weighs of the items front and center on the shipping page. So chances are the retailer you’ve been emailing runs into the same thing but just decided to go the other way with it and charge by dollar value. It’s hard to win on shipping charges either way.

The bottom line is customers many times don’t understand how much it really costs to ship something just in shipping charges — when you factor in all the fees such as fuel surcharges, annual price increases, and residential fees it’s really quite expensive. Not to mention the boxes, packing materials, and time required to pack which which we don’t even charge our customers for…

By: Karen

Karen — Mon, 30 Jun 2008 18:50:25 +0000

IMO, I think females view high shipping charges as a dealbreaker if there is a store nearby that they can just visit. Males seem to feel the shipping charge is worth the aggravation of going to the store. I think it truly depends on the item.