May 17, 2018
How Fast Shipping Programs Benefit Early Movers in Ecommerce
This blog post was originally published by Deliverr, which is now Flexport. The content has been adjusted to fit the Flexport brand voice and tone, but all other information remains unchanged. With the merging of Deliverr’s services (DTC fulfillment, B2B distribution, and Last Mile delivery) into Flexport’s existing international freight and technology services, we’re now able to provide merchants with true end-to-end logistics solutions spanning from the factory floor to the customer’s door.
How can you increase your conversions, how fast can you deliver a product, and for what cost?
Through our research, we learned that if you want to boost conversions, you need to:
- Offer fast shipping options. Fast shipping is the name of the game. Consumers want to be able to order something and get it quickly. 45% of consumers expect items to be delivered in 2 days or less, which 54% of shoppers define as fast shipping.
- Offer free shipping. Whether you set an order limit or increase delivery time, offering at least one free shipping option can help sway customers your way.
These two numbers have a giant impact on your eCommerce business conversion rates. If you don’t optimize for shipping, you’re losing out on sales and putting yourself at risk of cart abandonment.
Amazon Before: A focus on price
More than half of the top 1000 sellers on Amazon are using Fulfilled by Amazon (FBA) and as a result, an overwhelming majority of their items are eligible for Amazon Prime, a fast shipping program that ensures quick delivery (among other things). This isn’t by chance. Amazon Prime members have topped 100 million, making the program larger than Costco. All of those members prioritize items that are Prime eligible when they shop and buy.
Here’s how Amazon Prime changed the focus from price to shipping. Knowing these trends, and that it’s already happening with other marketplaces, will help you get a leg ahead of your competition.
Enter Amazon Prime. Although Prime launched in 2005, it didn’t start investing heavily in the program until much later. Even then, in 2012, it was estimated that Amazon spent $11 more money than it earned per Prime user.
This was an opportunity for sellers to get on Prime and ride the wave that Amazon created with their massive marketing spend. When Amazon pushed Prime, all sellers who had Prime-enabled listings benefitted as well, due to increased prominence in the marketplace.
Amazon Today: A focus on Prime
Today, their website now features Prime in multiple locations on their homepage, including right on their logo.
Amazon also reorganized their site architecture around Prime listings, including preferential treatment with Amazon deals and the buy box. Take a look at how Amazon’s search results for a “television” all feature Prime-enabled items.
Not only is “Prime” a filter that stands out (it’s colored blue and near the top of the filter options), there is also a Prime-enabled sponsored item at the top, and 9 Prime-enabled items before we get to the first non-Prime television search result.
Needless to say, Amazon is pushing for Prime and many sellers have taken note. However, back in 2005 and 2006, when Amazon Prime and FBA were first getting started, the competition wasn’t as cutthroat.
All of the eCommerce sellers who moved quickly to join Amazon Prime and FBA had a leg up when Amazon started pushing Prime with their platform. They were able to do this with daily deals, featuring fast shipping, and making it easy to filter by Prime.
For example, Woot is a daily deals website purchased by Amazon in 2010. In addition to offering great daily deals, they also have special shipping benefits for Amazon Prime members like free standard shipping.
How early-movers benefit from fast shipping programs
All of the FBA/Prime-enabled sellers received a tremendous leg up on their competitors. Here’s how the cycle went:
- Early movers were able to get traction on their listings for the reasons illustrated above.
- This got more sales, which enabled them to source at cheaper rates.
- Cheaper rates allowed them to invest more in optimization and quality control.
- So they show up higher in search and have better processes in place (product preparation, etc).
If you missed the Amazon Prime boom, don’t worry. We expect to see similar trends with other marketplaces, such as eBay, Walmart, Google and Wish.
For example, on eBay daily deals, we’re starting to notice a big uptick in the percentage of listings enabled with eBay’s fast shipping program, eBay Fast ‘N Free. We’ve also seen it’s easier to get featured on eBay deals when you have fast and free tags. Walmart and Jet are now entirely architected around listings with free 2-day shipping (search results, buy box, etc.), with listings not having that tag showing up last.
Fast eCommerce shipping programs you need to be on to increase your conversions
Fear, one of the three driving forces of human behavior, plays a big role in what we buy and how we buy it. While browsing your eCommerce store, fear bustles around the customer’s mind creating doubts and reasons that avert conversion. What if it doesn’t arrive on time? What if it’s broken?
As sellers, it’s our job to show customers all the reasons they should buy. Offering fast, reliable, and free (or at least affordable) shipping ensures the product will reach them on time and intact. Here are the fast shipping programs you should be on across different marketplaces.
6 Fast eCommerce shipping programs to get on to raise conversions
Most marketplaces today have a fast shipping tag used to attract customers and raise conversion rates. We compared 6 of the major eCommerce shipping programs, the impact they have, and how you can use them to your benefit applying them in your business strategies.
1) Walmart TwoDay (formerly WalmartFree 2-Day Shipping)
Walmart offers 2-day shipping on orders over $35 and free 3-5 day shipping on other qualified items. Unlike Amazon, Walmart shoppers don’t need a membership to make the most of this discount. Both these deals are great from the customer’s perspective, but how does it affect sellers and their conversion rates?
As with eBay, customers can sort items based on shipping. Offering free shipping makes it easier to win the Walmart buy box and get your products in front of potential buyers. Walmart is agressively promoting 2 day shipping, so as a seller, you lose sales if you can’t offer fast shipping.
Walmart sellers should begin experimenting with fast and free shipping options. Track and measure the results and see which ones gives you the best conversions at the lowest cost to you.
2) eBay Fast ‘N Free (Formerly eBay Guaranteed Delivery)
In a bid to up its game and increase its marketplace competitiveness, eBay launched eBay Guaranteed Delivery (eGD) in 2017.
Customers can search eBay based on guaranteed delivery time. If the customer doesn’t get their item within the timeframe, they get a full refund on shipping and a chance to return the item for free.
The program offers two options for sellers. If you ship items from a single location and agree to handle all orders in one day or less, eBay will set the delivery date for you based on the item’s destination and be responsible for any shortfall. However, if you ship from multiple locations, you’ll be expected to set a realistic delivery date for your customers and estimate how long shipping will take.
eGD decreases risk for the customer; they can now buy with confidence, knowing exactly when something will reach them. While sellers do need to meet specific requirements, joining is simple and profitable. Offering guaranteed delivery will help you show up in more searches and the increased visibility will likely raise conversion rates.
3) Amazon Prime
Amazon is a leader in eCommerce fast shipping with their Amazon Prime service. They pushed for fast and free delivery early on, and this strategy paid off.
Sellers who want to use the service can use Fulfillment by Amazon (FBA.) You send your items to one of the Amazon warehouses, and they take care of the packing, shipping and customer service.
By using FBA and being Prime eligible, you get access to a consumer base that’s 5½ times more likely to hit that buy button and increase sales. Prime customers convert 74% of the time, compared to just 13% of non-prime shoppers. And this is just during normal shopping times.
By joining Prime, you also get access to Prime Day, a 32-hour period of special offers geared at Prime customers. On Prime day in 2017, conversions increased by 51% and customers purchased 23% more products than in the 6 week period leading up to Prime day. This conversion rate has been increasing year over year.
If you sell on the Amazon Marketplace, then getting on Amazon Prime for at least a portion of your products can help you tap into that market, gain access to more buy-ready customers, and raise conversions to increase profits.
4) Google Shopping (Formerly Google Express)
Google Shopping is Google’s marketplace, currently only available in the USA. It’s attracted big names like Walmart and Target as well as local and online eCommerce businesses. With no monthly or annual fees and an easy to use mobile app and desktop site, buyers like it.
To sell on Google Express, you need to ask to fill a Google Express Interest Form. If you are accepted, your products will appear on Google Express, Google Assistant, and Google Search.
Most of the sellers on this platform offer free 2 day shipping on orders above $25 or $35 USD so smaller eCommerce sellers do need to match or beat them to rank on search and win the Buy Box.
Experiment with different shipping options and measure how customers respond. Because you are responsible for shipping and delivery, you need to make your own delivery times clear to your customers and set out expectations.
5) Wish Express
Wish connects Asian sellers with US and European buyers so the marketplace offers some pretty competitive prices. Because of geography, delivery times with Wish tend to be pretty long. Wish Express sets a delivery time frame. Sellers basically promise buyers they’ll deliver the product in X number of days, and the delivery windows vary from country to country.
Wish Express is useful for sellers because you can choose to offer it just on specific products. Plus, in a marketplace of long delivery times, it helps you stand out. Southeast Asia has only just started offering same-day shipping, and 5.6% of UK deliveries don’t arrive at their destination.
Unlike our other options, Shopify isn’t a marketplace, it is a multi-channel commerce platform in which sellers run their online stores.
Shopify provides its merchants with a variety of built-in shipping options, including functionalities to print their own shipping labels via pre-negotiated rates with leading carriers and/or leveraging 3PLs depending on volume and needs of the merchant. Shopify businesses can offer free shipping, which is simple to set up in Shopify.
Tip: You can offer your own customized Free 2-day delivery badges on Shopify when you integrate with Deliverr.
The actual set up will depend on the way you run your store, but the standard options, costs, and providers apply. You can set up your shipping offer by setting a minimum order price, encouraging customers to buy more. Or you can set up weight-based shipping to help you provide a good deal and encourage buyers, while still charging more for very heavy items. You can access all your shipping options in your settings under “shipping.”
Shipping is the life-blood of eCommerce and it plays a crucial role in attracting new customers and retaining existing ones. Be sure to get it right, because your competitors will be doing everything they can to get ahead.
To sum it all up:
- You must offer fast and free shipping to stay ahead of your competition.
- Reliable delivery assuages buyers’ fears, and helps to increase conversions.
- Aim for fast shipping tags on: Amazon Prime, eBay Guaranteed Delivery, Walmart 2-day, Google Express, Wish Express, and in your own eCommerce store.
The contents of this blog are made available for informational purposes only and should not be relied upon for any legal, business, or financial decisions. We do not guarantee, represent, or warrant the accuracy or reliability of any of the contents of this blog because they are based on Flexport’s current beliefs, expectations, and assumptions, about which there can be no assurance due to various anticipated and unanticipated events that may occur. This blog has been prepared to the best of Flexport’s knowledge and research; however, the information presented in this blog herein may not reflect the most current regulatory or industry developments. Neither Flexport nor its advisors or affiliates shall be liable for any losses that arise in any way due to the reliance on the contents contained in this blog.