What Matters More to Online Shoppers: Discounts or Free Shipping?Karen Axelton
As the holiday shopping season gets underway this week with Black Friday, most ecommerce businesses will rely on one of two tried-and-true tools to attract shoppers: free shipping and price discounts. But which of these deals is more enticing?
The answer is a resounding “It depends.” Depends, that is, on what demographic you’re marketing to. A couple of recent studies reported by eMarketer shed some light on whether free shipping or discounts work best.
Overall, eMarketer says, percentage discounts are the most effective incentive to get customers to buy, cited by 30.9 percent of respondents. Number two on the list: free or discounted shipping, which influences 21.8 percent to buy. Third most popular: A dollar-off discount (i.e., $10 off $50) will get 12.7 percent of shoppers to spend. (At the bottom of the list, buy-one-get-one-half-off offers barely generated a ripple, motivating a mere 3.6 percent of customers to buy.)
However, another study that delved deeper into demographics found preferences for different offers vary based on age groups. Customers age 46 and up say free shipping is their biggest motivator; more than two-thirds say free shipping will get them to buy. What’s more, they get actively annoyed by sites that don’t offer free shipping.
In contrast, consumers aged 18 to 45 would rather get a discount than get free shipping. Those aged 25 to 34 were especially motivated by percentage-off deals (34.1 percent), while only 13.9 percent of them care about free shipping.
What do these numbers mean to your marketing? You’re likely to get better results by personalizing your offers. If you are able to segment your customer email lists by age, for example, try offering free shipping to the older age group and discounts on price to the younger crowd. Be sure to try different offers, such as different amounts for free shipping, different percentages off and different dollars off, and to measure the results of each offer so you can tweak your emails accordingly.
Speaking of measuring, what really stands out to me in this eMarketer report is that nearly 20 percent of marketers admit they don’t know which offers work best because they don’t bother to track their results. If you’re not keeping tabs on results, you might as well throw your marketing money out the window. If you do nothing else, use analytics to see what emails get opened, clicked on and convert to sales.
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Karen Axelton is Chief Content Officer of GrowBiz Media, a media company that helps entrepreneurs start and grow their businesses. Visit her company’s blog at SmallBizDaily.com.