Redefining the ‘F’ Word: Do Shoppers Want Fast or Free Shipping?

As we enter the home stretch of the holiday season, should small to midsize businesses (SMBs) even try to compete with one-to-two-day delivery times? According to a new study from ShipStation, there’s still hope to win shoppers over — even if retailers can’t afford speedy deliveries (and it doesn’t require a Christmas miracle).

Shipping Cost Outweighs Everything, But ...

When it comes to fast or free, SMBs should put their dollars toward offering low-cost shipping. In the aforementioned study, consumers reported that free shipping is 42 percent more likely to drive them to purchase vs. fast shipping, and 16 percent more likely to drive them to purchase vs. inexpensive products. However, even when shipping does come with additional costs, certain options are likely to sway shoppers. Specifically, 52 percent of consumers say that a two-day shipping option would make them more likely to purchase from a retailer. What’s more, 39 percent of shoppers say a next-day delivery option would make them more likely to purchase. Interestingly, millennials are 54 percent more likely to be swayed by a same-day delivery option.

Bottom line? Shoppers are loyal to brands they connect with and support on a deeper level. In the age of Amazon.com, it may seem like retailers have to do whatever they can to be as cheap and fast as possible. The reality is, however, that if retailers build a brand that creates a community through products that consumers can get behind, they’ll support the business and pay a little extra for faster shipping.

Shipping Isn't a One-Way Street

Returns play a key role in customer satisfaction when it comes to shipping — and it’s no secret that consumers prefer free returns. In fact, according to the same survey, 72 percent of shoppers say return policies directly influence their online purchase decisions, with 53 percent of shoppers being more likely to factor the cost of returns into their purchase decisions than they were just one year ago.

Beyond the cost of returns, consumers also believe online retailers should offer hassle-free returns, with 86 percent agreeing that the returns process should be self-service and not require interaction with a customer service representative. Returns are inevitable and can be costly and time consuming, but they’re also the cornerstone of e-commerce. Negative return experiences can quickly add up to thousands of dollars in lost potential sales. Shifting to a self-service portal can drastically reduce the time commitment of returns for both the customer and the retailer, ensures a consistent return policy, and decreases the number of return labels merchants have to void as unused.

The Shipping Experience Has a Lasting Impression

Overall, 80 percent of consumers say the shipping experience is what stands out most in their online shopping experience because it's the final touchpoint they have with the brand. In addition, a shocking 88 percent of consumers say the shipping experience impacts whether they will be a repeat shopper with a retailer again. And for brands that get it wrong? There’s a lot at risk, as 75 percent of consumers say a negative shipping experience impacts their perception of the retailer more than their perception of the carrier that actually delivered the order. What’s more, 85 percent of consumers believe it’s ultimately the responsibility of the retailer to ensure that products ordered through them are delivered on time and as expected.

Luckily for retailers, basic communication goes a long way. Ninety-five percent of consumers agree that if retailers provide fast and honest updates regarding shipping delays or issues, they’re less likely to be upset about delays.

All of this to say, shipping should be a high priority touchpoint, as the final impression for online retailers can be just as — if not more — impactful as the first impression for brick-and-mortar retailers. E-commerce retailers can get ahead of the competition this holiday season by leveraging the right tools to streamline shipping and returns processes, ultimately resulting in increased brand loyalty and a boosted bottom line.

Andrea McFarling is the vice president of marketing at ShipStation, the world’s leading web-based e-commerce shipping solution.