With the announcement that in the New Year retailer Morrison’s intends to offer home delivery from their new online store for just a pound (compared to Tesco and Sainsbury’s, minimum £3 and £2.99 respectively), it got me thinking just how important reduced postage and packing costs are to successful online sales.
The retail world has moved online and the inevitable cost of delivery is something we have all had to pay at some point or another. It seems reasonable for the consumer to be charged surely? Maybe not. There is a solid business argument these days for businesses to reconsider their delivery charges policy and offer free postage and packaging. It is a fact that hidden delivery costs are one of the most common causes of “basket abandonment” (the loss of a customer during the final stages of ordering) so the issue is critical in any online retailers strategy.
Delivery costs are obviously something the retailer has to cover but a well thought out delivery cost structure can help to significantly reduce those lost sales.
A lot depends upon the type of goods you sell and the margins you have to work with of course. John Lewis (johnlewis.com) had a particularly spectacular Christmas last year with online sales. They attribute a degree of that success to their introduction of tiered delivery costs. They outline the details of their various costs on every product page and offer free standard delivery within five working days if the items are worth more than £50, otherwise there is a £3 charge. They also offer a free ‘click and collect’ service.
If you have managed to get a potential customer on your website, and to the point of almost making a purchase it is extremely frustrating to lose them at the final point of purchase just because of the delivery cost. Something to consider as we approach Christmas and the busiest season of the year for online sales.
At First Internet we advise many of our clients on e-commerce strategy and the best way to optimise your online sales through marketing, search engine optimisation and pay-per-click marketing. If you think your marketing budget and e-commerce website could be working harder and delivering you a better return on investment then contact us today.