Free Shipping? Canadian Retailers combat Cart Abandonment Issues
Thursday, December 6, 2018

Categories: Market Research

Free Shipping, eh? How Canadian Retailers Combat Cart Abandonment Issues

The OrderDynamics Omni 2000 Global Research reports 73.9% of retailers with e-commerce sites offer standard Free Shipping with a minimum purchase. A further 2.8% offer it on a promotional basis.

There are many benefits for consumers who shop online. Choice, convenience, and being able to shop for competitive pricing are many of the reasons why consumers continue to direct many of their dollars online. But for every benefit, comes a barrier and for online shopping, one of the top barriers is shipping costs.

In fact, many consumers cite high shipping costs as a significant reason for cart abandonment. After all, in a hyper-competitive industry like retail, there is no room for abandonment issues.

It Helps Cart Abandonment Issues

67.45% of online shopping carts are abandoned before the customer completes a sale.When free shipping was first introduced by e-commerce companies, the belief was that only large retailers would be able to offer such a luxury. But as the prevalence of online shopping has grown. Every retailer from Amazon-size companies to smaller, more local businesses are now responding to consumer demand for lower cost/ free shipping.

This response was necessary after research discovered that higher and higher numbers of customers would abandon a cart full of purchases (even those that offered the best deals) once they got to the checkout page and discovered high shipping rates.

For retailers today who offer free shipping, the key to levelling the playing field has been the Minimum-Basket-Value (MBV). When retailers offer to ship orders for free based on a minimum purchase threshold such as $50, shoppers are more likely to continue with their intended purchases.

How Does Free Shipping Benefit Retailers AND Consumers?

In fact, there are many reasons why this practice has become the standard for online shopping. Not only has the increase in free shipping been beneficial to consumers (who are always looking to save money), but it has also led to advantages for the retailers.

Greater revenue: With minimum purchases values set to receive this service, consumers will often purchase more items in order to hit that minimum. Larger than expected basket sizes have led to greater revenue for the retailer.

An average of 178 Canadian retailers offer free shipping, with an average MBV for Canada of $48.89 USD

Control fulfillment centres: Retailers who want to remain competitive on shipping costs have adjusted their fulfillment infrastructure to do so. Orders are no longer fulfilled only from distribution centres but can also be sent from physical retail locations which cut down on costs by taking advantage of local delivery services.

Loyalty: Once a customer has discovered this perk from a retailer, they are much more likely to return to that retailer for future purchases. This is why offering standard free shipping year-round, rather than using it as a promotional tool is a more advantageous route for retailers who are looking to build loyalty.

Canadian Retailers Best in MBV for Free Shipping

Canadian retailers are extraordinarily competitive, and they are giving global retailers a run for their money when it comes to free shipping.

Here are 10 Canadian retailers who are leading the way:

Lululemon

The must-have yoga retailer offers free shipping on every order. No minimum purchase!

Zebra Blinds

This online window treatment retailer has no minimum purchase value for free shipping.

Canaflora

With physical locations across Canada, this floral retailer always offers to ship for free with no minimum purchase value.

The Shoe Company

A division of Town Shoes, this footwear retailer has a minimum order value of $35 for free shipping.

DeSerres

One of Canada’s leading destinations for creativity, this retailer offers free shipping on minimum orders of $39.

Roots

With this iconic Canadian retailer, you only have to spend a minimum of $50 to get your shipping for free.

Simons Is your company implementing omnichannel retail? Find out with this benchmark.

The Quebec-based department store offers free shipping on minimum orders of $100.

Hudson’s Bay

One of Canada’s oldest retailers offers the free option on minimum orders of $99.

Browns Shoes

Offers a standard flat rate on shipping or free shipping on orders over $198. Read more about Canada’s beloved shoe retailer in our customer story here.

Pool Supplies Canada

As Canada’s leading pool supplies destination, this retailer offers to get your supplies to you for free on minimum orders of $199.

Cart abandonment issues are one of the greatest challenges for online retailers today. A significant victory for these issues can be won when retailers offer free shipping. Minimum basket values can be set to help offset some of the costs associated with free shipping for retailers.

For more information on the state of omni-channel retail around the world, including free shipping, download your copy of the Omni-2000 Research Report.

 

Author: 

Charles Dimov - Director Marketing OrderDynamics

 Charles Dimov is VP of Marketing at OrderDynamics. Charles has 23 years experience in Marketing, Sales and Management across various IT and Technology businesses. Previous roles include Chief of Staff, Director Product Marketing, and Director Sales. Charles has held roles in brand name firms like IBM, Ericsson, HP, ADP, and OrderDynamics.