Written by Jim Babb
Modern marketing is constantly evolving. One advantage of working with clients is that we get to examine real-time learnings across a variety of different accounts. Researching what other companies are doing is another great way to keep on top of what's effective.Hidden Marketing is a series we’ve created where we learn from market leaders by becoming their consumer. We did this by going through the check-out process on the websites of the 50 largest DTC brands. We then recorded and analyzed their strategies.
Now more than ever, each touchpoint in the customer experience should be considered part of your marketing. And this particular moment of conversion holds numerous opportunities for any company selling products or services online. Even if you're not in the e-commerce biz, there's a lot that can be learned from these examples about creating systems that encourage users and customers to take action.
This Hidden Marketing piece is about free shipping. Is it a must-have for the modern consumer brand? Amazon Prime set the stage for a new normal. That normal includes free, two-day shipping. And DTC brands are leading another evolution of shopping - one where their store is a website and every detail of the customer experience counts. DTC mattress company Casper has even made free shipping a core value proposition
A study from the Baymard Institute found that 58.6% of US online shoppers who have abandoned a cart within the last three months were just browsing.
But the second most popular reason was “unexpected costs at check out” - mainly shipping, taxes and fees. This reason alone still accounts for 22% of abandoned carts. Free shipping can secure A LOT of sales. It can also help encourage customers to purchase who may not have added to the cart in the first place. Have you ever chosen one brand over another because they offered free shipping? We certainly have.
It's easy to jump to the conclusion that free shipping will transform your business and increase your sales. But the truth is, there's no such thing as free shipping. Someone is paying for the shipping, and ultimately that's either the customer, the business, or most likely, both. By raising your prices and offering free shipping, you may end up with fewer carts in the first place because of the higher costs of the goods you’re selling. If you don't raise prices, you could end up with a few more customers and a lot less profit.
We looked at shipping prices of 50 of the biggest DTC brands to see whether they’re all following the Amazon model, or if they're taking a different approach. The companies we examined included Warby Parker, Casper and Away, while we also looked at 47 other companies that sold physical products in the home, hygiene and beauty, health, food, apparel and accessories industries. Here's what we found:
The majority of companies we studied did offer unconditional free shipping. Unsurprisingly, the overall industry seems to be trending in that direction. That 56% is far from universal though. And there appear to be specific criteria that most of these companies meet.
Of those companies offering free shipping, we found that almost all of them fall into one of two categories:
It is generally assumed shipping is part of the cost for a subscription because you’re not just buying a product - you’re buying a service. Additionally, committing to pay for something every month, week or year is a big choice. There needs to be an incentive.
Exception: The one instance where a subscription did not yield automatic free shipping is custom skincare company Curology. The company charges $5 for shipping if the customer choses the 30 day supply option. If they take the 60 day supply subscription, shipping is free.