January 3, 2007, 12:00 AM

Free shipping a powerful conversion tool this holiday, survey finds

Free shipping strongly influenced conversions this season, according to Foresee Results—but it’s now so common among online promotions it’s losing the power to differentiate a site from competitors.

 

Free shipping was a powerful conversion tool online this holiday shopping season, but it’s now so commonplace among online holiday promotions that its presence on a site is losing its power to differentiate the site from competitors. Those are among the conclusions ForeSee Results recently based on data from its Top 40 Online Retail Satisfaction Index.

The survey included responses from more than 10,000 online shoppers who browsed or bought during the holiday season at the top 40 online retail sites by revenue, as ranked by Internet Retailer. 41% of the consumers surveyed cited free shipping as the primary factor in their holiday purchase decisions. 79% of those surveyed said free shipping influenced them to choose one site over another.

But free shipping stands to produce different long-term outcomes depending on how it’s packaged, survey results suggest. Free shipping without restrictions increased customer satisfaction, conversion and loyalty, but free shipping with restrictions did little to impact customer satisfaction or loyalty.

The survey also found that free shipping, especially when offered without restrictions, is a particularly powerful influence on conversion among first-time buyers. Overall, 63% of online holiday shoppers surveyed recalled free shipping offers, 24% said it was not offered to them and 13% couldn’t remember of free shipping had been offered.

“It’s much easier for retailers to match free shipping than it is to match web site functionality or merchandising,” observes Larry Freed, CEO of ForeSee Results. “Eventually, free shipping will become just another cost of doing business, but for this holiday season it was an effective conversion tool for first-time buyers.”

 

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