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Shipping Costs Heavily Affect Online Customer Behavior, Loyalty

by MarketingCharts staff
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A significant proportion of consumers also see the need for retailer improvement for ease of returns/exchanges (42%), variety of brands/products, and online tracking ability (both at 38%).

The report notes that examining levels of customer importance and satisfaction reveals that ease of making returns/exchanges is above-average in importance and below-average in satisfaction, while the availability of free or discounted shipping is above-average in satisfaction and slightly below-average in importance. This suggests that retailers should focus on their return policies first before tackling their shipping policies.

Free Shipping Key to Customer Recommendations

According to the “Online Shopping Customer Experience Study,” roughly two-thirds of customers said that free shipping has either led them to recommend a retailer (63%) or would lead them to do so (68%). This factor has led to more recommendations from customers than others such as receiving a product when expected (41%), free returns (29%), and easy returns and exchanges (28%).

Shipping Charges Can Cost Retailers

If customers are ready to reward retailers for discounting shipping charges, it stands to reason they’re also ready to punish them for higher-than-expected costs. Among respondents that had abandoned their shopping cart, one of the top reasons for doing so was that shipping costs made the total purchase cost more than expected, with 55% saying this led them to abandon their purchase. 40% also abandoned a purchased based on shipping and handling costs being listed too late.

Indeed, among all respondents, free shipping options (73%) topped the list of most important information and/or options at checkout, ahead of estimated or guaranteed delivery date (60%) and variety of payment options (56%). This supports an October 2011 study from the e-tailing group, which found online consumers rating free shipping as their most important site promotion.

Return Policies Also Prove a Key Factor

Further data from the comScore report reveals that 63% of customers look for a returns policy before making a purchase online, and more than 3 in 5 online shoppers have returned a product they bought online. A lenient, easy-to-understand returns policy leads almost half of the respondents to shop more often with a retailer, and to recommend the retailer to a friend. It can also prove a competitive advantage, with 35% saying they would drop another retailer with a less easy returns process.

Other Findings:

  • 74% of the respondents rated their satisfaction with free/discounted shipping a top-2 box score, behind other aspects such as ease of check-out (83%) and variety of brands/products (82%). Just 65% were satisfied with the ease of making returns or exchanges.
  • The most common number of days consumers are willing to wait for most purchases are 4-5, or 6-7 (both at 29%).
  • Almost 1 in 4 shoppers who abandoned their cart due to delivery time did so because no estimated delivery date was provided.
  • The economy ground option is both the most expected (78%) and most chosen (67%) shipping option.
  • 3 in 4 respondents agree that the provision of tracking information is an important service every retailer should offer. The most popular shipment tracking service is email or text notifications with a tracking number (45%).
  • The best returns experience is based on a return label inside the box (62%), an easy-to-print returns label (61%), and an automatic refund (57%). The most common complaints are having to pay for return shipping (66%) and having to pay a restocking fee (43%).

About the Data: The Online Shopping Customer Experience Study, a report commissioned by UPS, evaluates consumer shopping habits from pre-purchase to post-delivery. The study is based on a comScore survey of more than 3,100 U.S. online shoppers.