One of the most important and potentially expensive decisions that an online retailer can make is whether or not to offer free shipping. Also, if free shipping is offered, the decision on how to go-to-market with free shipping is critical too. Few decisions can increase conversions as much. And fewer still can increase expenses as much either.
If free shipping is a money loser, you can’t make it up on volume.
The good news is that there are a number of time-tested tactics you can use to change the equation — altering the ratio of conversion increase versus expense increase while introducing levers that will increase Average Order Value (AOV).
Our CEO’s guest blog post on Practical Ecommerce, 7 Ways to Make Free Shipping Profitable, explains how online retailers can use a combination of creative pricing tactics and A/B testing to transform free shipping from a money loser into a profit center. Manish Chowdhary explains how to use advanced, yet easy-to-use, analytic approaches to baseline performance, introduce new tactics, and measure impact. The end-result is higher conversions, higher AOV, and manageable shipping expenses.