People just love not paying for stuff. Free delivery is an insanely powerful sales tool for any ecommerce brand, because we consumers just want it so dang much. The Free Delivery Limit is the biggest motivator, and therefore the easiest method, to increase your average order value and your average items per transaction.
Lil top ups, big difference
Monki gives me free delivery when I spend over £50 on colourful dresses. Lauren Aston Designs rewards me with free shipping when I binge £60 on super chunky yarn. Ponderlily passes on P&P when I buy my annual planner and pens. These amounts are Free Delivery Limits.
How many times have you been shopping online, popped what you need in your basket, spotted that you’re £5 short of free delivery, and headed back to find an item that’s about £6-£10?
A whole heap? That’s literally the point.
When consumers hit the checkout and see that delivery costs a few quid, or free if they spent a little bit more – they’ll generally try and spend a little more. That’s because of a nifty internal calculation: instead of seeing the amount saved as a fraction or percentage of the total order, they instead think of it as a discount of that one additional item.
Let’s go back to the basket you just popped together, and let’s say it’s a teapot and a pair of cups that come to £44. Standard UK delivery from this online shop usually costs £5, but it’s free when you spend over £50.
We are probably not thinking “Oh, if I find something for £6, I basically get 10% off the teapot and cups I want and 10% off another thing I didn’t want then but do want now,” it’s far more likely instead that our brains are telling us “Hey babes, if you can find something for £6, you’re basically getting that thing for £1! That’s one heck of a bargain!”.
Because it is babes, it’s over 80% off.
80% off one item is an amazing deal. 10% off an order – well, most of us expect that just for giving away an email address these days. And yet, the first is So. Much. More. Powerful than the second. And that’s why your Free Delivery Limit is probably the most powerful sales tool at your disposal.
Don’t pick an arbitrary free delivery limit
And here’s the best part about free delivery limits – it works for every type and every size of online shop. If you run a small business that sells products, ya probably want some of that juicy mega-motivation for your customers too – and you can have it.
However, we need to be strategic and get that value just right for your brand, customers, and products. Setting your free delivery too low can eat into your business margins when you end up writing off delivery costs on too many orders.
It also leaves you with a much smaller audience pool to motivate, since plenty of customers will be reaching the limit before visiting their baskets and receiving that extra tickle of motivation.
Let’s go right on back to our teapot purchase, and instead of having a £50 Free Delivery Limit, it’s £30. How would this make you feel as a consumer? My guess is that it wouldn’t make you feel anything at all.
It’s so much lower than we were already planning to spend, that at best it gets a shrug of “oh that’s nice I guess”.
Setting the free delivery limit too high ain’t great either. You’ve guessed it, we’re going back to the teapot – and now the free delivery limit is £80. We’re already ordering 3 products, and at £44, are only half way to getting our reward. We’d have to spend £36 to save £5, and babes, that ain’t no bargain.
And ya know what, now my teapot merchant is setting their Free Delivery Limit at £120. It’s not hard to imagine that this massive difference could leave customers thinking “Oh this business only rewards people who spend ludicrous amounts of dolla dolla – not normal folk like me. What a bunch of tea leafs”*.
We need to find the Free Delivery Limit sweet spot.
Head to our accompanying blog post, 4 steps to picking the free delivery limit for your online shop to learn how to find this magical sweet spot.
