Offering free shipping has become a powerful customer incentive during the holidays. Here are some cost-effective ways that can help you put your best shipping offers on the table this holiday season to help offset shopping cart abandonment and ensure customer satisfaction.
When it comes to the holidays, retail businesses must keep a laser focus on the busiest season of the year. The final months of the year are filled with peak shopping days and peak return days. To help capitalize on profits, we’ve made sure to note 2016’s highest grossing billion-dollar shopping days. Get an early start making decisions about stock replenishment, holiday marketing and return communications—all by using the calendar below. Print it, bookmark it or download it for easy access in the busy season ahead.
The holidays might be a while away, but if you are a sales-oriented business, it’s never too soon to start planning. For many retailers, particularly those in ecommerce, the holiday shopping season is the biggest and busiest time of year. And, it’s expected to only get bigger with a projected 15.8 percent climb in ecommerce for the 2017 holiday season1.
To prepare your business for what lies ahead, it’s helpful to start by studying customers’ expectations and where and when the spending took place in the previous year. Ready to dive in to see what’s in store for 2017?
What to Expect this Holiday Season
Consumers are shopping last minute. While Black Friday and Cyber Monday generate buzz online and offline, last year the majority of consumers shopped in the weeks following Cyber Monday2. This is due to several factors including retailers extending cyber sales and better online shipping options3.
Online and mobile shopping will continue to grow. Last year, over half of consumers shopped online for gifts, with 20 percent using their mobile devices4. And, as companies work to refine their omnichannel strategies to accommodate a generation of mobile-friendly consumers, ecommerce will likely continue to dominate.
Consumers are hunting for bargains. Last year, 73.3 percent of customers relayed that the top factor for choosing a retailer during the holiday season was sales or price discounts5. Given this, retailers should make compelling offers to increase their competitiveness.
Consumers want shipping deals too. In 2016, 48 percent of customers said free shipping and shipping promotions was a key factor in purchasing from a retailer, the highest ever6. When planning for the 2017 holiday shopping season, companies should consider integrating free shipping promotions if they haven’t already.
Companies garner more consumer support when they contribute to the quality of peoples’ lives. Today’s consumers are more willing to spend money on brands that they believe are meaningful and will enhance their personal wellbeing and the causes and communities they care about. A study found that for every 10 percent increase in meaningfulness a company can increase its purchase and repurchase intent for consumers by 10 percent and 5 percent respectively7.
For the 2017 holiday shopping season, making buying exciting, affordable and easy, as well as getting merchandise into customers’ hands in a timely, affordable fashion, are important factors for retailers to consider when planning their retail strategies. As the above insights suggest, customers will be shopping for the best deals with the quickest delivery turnaround and they’ll expect shipping costs to be part of the deals offered. Start planning your promotions now to have an amazing holiday season of sales.
Properly staffing your business is crucial year-round, and especially so during the holidays. Hiring the right workers and giving them the right training can have countless positive effects on your operations. With the right staff, shipments could be picked, packed and shipped faster. Stock rooms and warehouses could remain orderly and organized. Employees would more likely make fewer mistakes and help improve return rates in the future. Here, we dive into six hiring tips for the most important time of the year.
Start Planning Early
Every year, retailers hire hundreds of thousands of seasonal workers. To help ensure you don’t miss out on the best talent, start establishing how many employees you need to hire early in the year, and begin the hiring process while the applicant pool is large.
Advertise Your Openings
Assess your recruiting strategy and seek out the most valuable channels to find seasonal workers. Utilize industry job boards, make sure your job postings are accurate and up-to-date, and don’t forget about your social media channels. Post job opportunities on your most popular channels to leverage another pool of talent: your customers.
Recruit with Help from Your Employees
Happy, hard-working employees are your greatest advocates. Ask your staff to refer applicants for open positions, and give them incentive to do so. Countless companies use employee referral programs as one tool among many to find quality applicants.
Be Clear During Interviews and Ask the Right Questions
When meeting with applicants, communicate the expectations and responsibilities of the role clearly. If the job requires working late nights and holidays, be frank and honest about those responsibilities. Do not, however, ask questions that suggest applicants with personal responsibilities need not apply (for example, questions about child-care arrangements or or child-bearing plans).
Take the Time to Train Employees the Right Way
No matter how large your seasonal staff may be, giving them the proper training could make a noticeable difference on your operations and your bottom line. Work with full-time and star seasonal employees to construct a training program for every type of position you need to fill. Then incorporate it into your onboarding process to get your new team up to speed. Consider cross-training your employees for added efficiency during peak shipping times.
Get Acquainted with the Laws for Seasonal Employees
Familiarize yourself with the legal restrictions for temporary workers. This will help guide how many people you need to hire to properly staff your operations. Knowing local laws can also help you avoid any legal issues that arise with temporary employees.
Helpful Tip: Consider cross-training your employees for added efficiency during peak shipping times. Learn more about seasonal staffing from
Terry Bicycles’ CEO Liz Robert
With careful planning, good hiring practices and efficient training, your business can get into great shape for the holidays. You may be able to improve your shipping operations, fulfillment times and your bottom line by carefully managing your seasonal team. Your year-end sales and your customers will thank you.
As marketers and strategists, we all strive to find opportunities to transform campaigns from one-dimensional to omni-channel. With nearly limitless options, we’re faced with the challenge of leveraging the strengths of the right channels to reach consumers with the right message at the right time. Read full article
The holidays present a wealth of opportunities for businesses, but competition is fierce. Marketing channels are inundated. Customers are flooded with offers from countless brands. Cutting through the noise is crucial for success. In this case study, we’ll shine a light on a national retailer that pivoted its marketing strategy to incorporate direct mail and saw a dramatic lift in its holiday business.1
Planning for a Strong Performance
As the holiday season approached, the retailer searched for ways to increase its average customer spend. Having several eCommerce brands under a single umbrella—fresh flowers, gift baskets, popcorn, gourmet foods, and sweets—the company was ready for the season of giving, but it wanted to boost its sales. At first, it explored traditional channels. A cornerstone of holiday marketing is sending single-brand catalogs, so the retailer sent them to both previous and current customers.2 It also considered e-mail and other digital media, but they presented a challenge during the holidays. With e-mail open rates and click-through rates down during this critical season, it was time for another solution.3 So, the company set its sights on direct mail.
Doubling Down on a New Channel
The retailer decided to roll out a robust direct mail campaign that would bring its family of brands together for the first time in one self-mailer. Hoping to increase loyalty and encourage purchases across its many brands, the company sent the mailer to customers who had previously purchased from one or more product lines. Designed with six panels, it featured all the brands and included coupons for free shipping and $10 off select purchases. It worked. With direct mail part of their omni-channel strategy, the individual brands experienced a 13% to 35% boost in orders, with average customer spend increasing by $1.50 per order. Thanks to unified brand marketing, each company also enjoyed a lower cost per order. Needless to say, the campaign was a success.
Ideas Worth Implementing
The retailer got a lot right when it came to direct mail. When leveraged strategically, direct mail can bring value through sales, brand loyalty, and more. Here are a few ways companies can pursue their business goals:
- Think Beyond the Catalog: While this print piece is a cornerstone of holiday marketing, it’s an expensive investment for small to medium-size businesses. Direct mail presents a simplified, economical way to deliver some of the same information in a more digestible form.
- Print Multiple Offers: Consumers actively seek out sales and coupons during the holidays. Mail can be used to communicate a number of different promotions. By including more than one offer, businesses may be able to strengthen the potency of their direct mail.
- Synergize with Other Channels: Email, paid search, and direct website traffic often drive sales for online retailers. By creating a campaign that pairs one or all of these channels with direct mail, companies could increase their marketing reach and boost the campaign’s memorability.
The holidays are an exciting time. Consumers and businesses go full speed ahead in search of the best gift and the most effective marketing campaign. With some focus, one retailer was able to incorporate direct mail into its marketing mix and grow sales as a result. By seeking out the perfect medium and messaging—tactics any business can mimic—the company set itself up for a happy holiday season.
Free shipping for online purchases is practically a necessity in today’s world, and it’s especially important during the holidays when brand competition is fiercest. In fact, according to omnichannel customer engagement firm STARTEK, 88% of customers say free shipping makes them more likely to shop online1. Small business owners in particular are probably wondering how to use free shipping incentives to boost sales. But if the investment doesn’t pay off, businesses could hurt their bottom lines by diminishing their net margins.
“88% of customers say free shipping makes them more likely to shop online.”
It can be tricky to establish a balance between increasing sales volume and maintaining profit margins, but one way to do this is to set a minimum order value for the free shipping incentive. It’s important for business owners to take time to carefully determine this value—when chosen wisely, a minimum order value for free shipping could be a huge boost to holiday sales. However, being unrealistic about how much customers are willing to spend can be detrimental to a growing business by driving away potential sales.
Here’s what business owners might want to keep in mind when it comes to leveraging free shipping incentives during the busiest shopping season of the year:
How to Determine Minimum Order Value
Businesses that decide to implement free shipping with orders that meet a certain dollar value often struggle to determine exactly what that minimum threshold should be. If it’s too high, businesses may not see much of an increase in sales volume and could potentially lose sales. If it’s too low, it could put their precious profit margins at risk.
One possible way to determine an appropriate threshold for free shipping is to determine your average order value. Knowing how much an average customer spends per transaction can help give you a better idea of what your minimum order value for free shipping might be. Think of what the tipping point for you will be: Customers need to easily add items that will push them to the dollar amount that earns the free shipping.
According to a model developed by data analytics company RJ Metrics, the number of orders above the median order value statistically decrease, but setting a free shipping threshold may effectively motivate customers to spend more in order to avoid paying for shipping2. So if your average customer is spending $45 per order, consider, for example, setting the free shipping threshold at $60 to increase the number of orders you receive above $45. It is important to remain realistic when determining how much extra customers are willing to spend for free shipping. You may consider A/B testing two threshold amounts and measure their effectiveness to inform your decision (e.g. $50 threshold for free shipping vs. $60).
According to Atlanta-based SEO and analytics firm ShivarWeb, another way to set the threshold is to consider the following formula when attempting to set a minimum order value3:
Proposed minimum cart value – average order value = X
X * Gross Profit Margin = Y
Y – Average shipping costs = Z
If Z < 0, then the threshold is typically not fiscally smart
The above can help businesses set realistic minimum values. With some careful calculations and goal setting, the increase in sales could offset the business expense of free shipping.
Actively Test the Tipping Point
Once you discover the tipping point for free shipping, it’s a matter of conveying your message to the people who visit your website. Consider alerting customers when they’re close to the minimum order value for free shipping during the checkout process and/or dedicating a portion of the screen to quickly add items that will make up the difference could encourage impulse buys to meet the free shipping minimum.
While the holiday season is a great time for free shipping promotions, there’s no reason to wait for this peak shopping time to implement a free shipping promotion. Maybe test the waters earlier in the year with short-term sales that use free shipping incentives to see if customers are willing to spend more than what was initially projected.
If you commit to understanding your customers’ online buying habits, you could see improved conversion rates and increased profits. If they perceive value from what you offer with a free shipping promotion, they may be more likely to put additional items in their shopping carts. Start now to consider ways in which you can prepare for the 2016 holiday season and find more inspiration with the “A 4-Part Plan to Make 2016 Your Best Holiday Shipping Season.”
Direct Mail Campaigns Can Drive Holiday Sales
Growing businesses need solutions to gain traction amid heavy competition, and direct marketing campaigns can provide a marketing win that could help your business stand out.
With today’s focus on email marketing, it can be easy to overlook the power of direct mail. But think about your own inbox and how overwhelming it can become. That’s where a physical piece of direct mail can stand out. In fact, a survey by Epsilon showed that 77 percent of consumers sort through their
physical mail as soon as they get it.1
“…77 percent of consumers sort through their physical mail as soon as they get it.”
While building loyalty is crucial to all enterprises, it’s a common growing pain in any industry (see Figure A below2). Business owners need new ways to engage customers, and reaching customers with a compelling timely message during the holiday season is a smart strategy to accomplish this.
Direct mail may be a savvy pivot from tactics many of your competitors maybe using. During the holiday season, most business-to-consumer brands are entrenched in competitive sales and aggressive pricing, but either of those can drive down profit margins. Even though slashing prices to stay competitive can keep companies afloat during the holidays, it’s a short-term strategy. The advantage of a direct mail campaign is that it can show consumers a commitment to their journey toward a happy holiday season.
The advantage of a direct mail campaign is two-fold: likelihood of consumers opening their mail around the holidays, making it an ideal time to increase the odds of your message being read. And, you’re likely to reach consumers right at their point of decision, providing a ready answer to a holiday challenge.
Make it Worthwhile: Determine Your Goals Now
Direct mail could easily provide a robust return on investment as long as it’s executed with a clear, actionable message. Many smaller businesses can benefit from adopting a more corporate outlook, especially when it comes to creatively allocating marketing dollars. While it may seem like an extra expense for a small-to-medium-sized business during crucial sales times like the holidays, this marketing investment could pay off when your brand focuses on presenting solutions to current—and potential—customers.
The type of holiday messaging your brand uses will likely depend on what you need to accomplish and how that dovetails with what you offer consumers. For example, if your budding enterprise is pushing for more digital engagement, consider adding QR codes that instantly connect customers with valuable digital content. Or, include a coupon for a discount on an online purchase, which will drive sales while encouraging customers to engage online.
Send a Clear Message to Your Customers
A key to successful marketing is often reaching consumers during their decision-making process and influencing those decisions by offering something valuable, whether it’s a discount or a solution to a shopping dilemma.
A direct mail campaign can help build awareness during the key holiday purchasing season. Direct mail can help familiarize customers with your brand. Even more so, it can help drive trial purchases when you offer customers something of value in your direct mail piece.
Direct mail can be the tipping point between considering and making a purchase, and having that first successful interaction with a brand can help build loyalty. Once customers have had positive experiences with a brand, those same customers are more likely to consider that brand for similar purchases in the future.
Your direct mail campaign should ideally reach customers at the critical juncture when they are evaluating options but before they make a purchase, and a strong holiday message that conveys value and commitment to their personal successes and happiness is the perfect way to help close that gap.
Need ideas for making your holiday direct mail more engaging? Check out these examples of how scents, textures, special formats, near-field communication (NFC) chips, and QR codes can help you connect more deeply with customers.
To offer free shipping or not to offer free shipping? Opinions on the matter are mixed. On the one hand, offering free shipping may help drive sales and provides a competitive advantage for retailers, but on the other, free shipping may contribute to margin erosion. So which is it: Opportunity or risk? A lever to drive more sales or a margin killer? As with most difficult questions, the answer may fall somewhere in the middle. Let’s see if we can shed some light on how to possibly provide the potential for free shipping while looking to minimizing its risks.
Let’s start by looking at some crucial market insights from a recent eCommerce study conducted by VWO1. Based on consumer surveys:
- The top reason why online shoppers abandon their shopping carts before making a purchase is higher than expected shipping costs.
- Almost two thirds of online shoppers chose the cheapest shipping option.
- Less than 5% of online shoppers claim that they don’t care about shipping costs.
- 24% of shoppers are ready to spend more to qualify for free shipping.
Free Shipping Strategies
Armed with this information, we can conclude two things: First, online retailers should not make the mistake of treating shipping costs as an afterthought or a secondary consideration. Shipping cost should be a key consideration when looking at both the customer experience and sales margins. Second, now more than ever, every online retailer should look to incorporate some kind of free shipping strategy into their transactional model, then carefully test and optimize it with an eye towards maximizing opportunity (driving sales) while minimizing risk (eroding margins). Here are six ideas to help you do just that:
Consider offering an annual premium or VIP membership to your best customers, and put free shipping at the center of the membership’s value proposition. The membership fee can help absorb shipping costs. Bonus: membership programs of this sort tend to drive average transaction value and buy rate, as referenced above, and can have a positive impact on customer retention, loyalty, and lifetime customer value.
Threshold-Based Free Shipping
Establish minimum order values for free shipping. (Free standard shipping for orders over $50 or $100, or whatever amount makes sense.)
Retailers can put free shipping instead of discounts at the center of special offers. For instance, to drive Holiday season sales, you might consider offering free standard shipping for any order over $40 from December 1 through December 24.
Email or Mail-only Promotions
These are similar to Limited-Time Promotions, but instead of making the promotions available to all customers, you can communicate them only to your best customers via mail or email.
Products with Benefits
Offer free standard shipping on high margin and/or easy-to-ship products. You may have to set up rules and exclusions for hard-to-ship and/or low-margin products that will help protect your overall margins. One way to address this problem is to build a product matrix that plots every one of your products along low margin/high margin and easy to ship/difficult to ship axes:
Doing this will help you identify which products (or product categories) should not be included in your free shipping program (products weighing more than 5lbs, for instance). If you communicate your shipping rules and exceptions to your customers early and clearly, they will better understand them.
Commoditized free shipping
Online shoppers can be impatient and prone to favor immediate gratification. As free standard shipping becomes increasingly commoditized, expedited and overnight delivery options can be leveraged as a value-adds against standard shipping. This means that while free standard shipping may keep up to two thirds of online shoppers from abandoning their carts before making their purchase, designing a checkout process that drives customers towards next-day or 1-2 day deliveries could shift a significant number of them to premium shipping options in the very final stage of their transaction. (Tip: Impulse purchases aren’t limited to products.)
Since either minimizing or eliminating shipping costs for standard delivery can create significant lift in both revenue and customer lifetime value, perhaps the question shouldn’t be whether or not the adoption of free shipping makes sense, but rather how to best incorporate it strategically without going overboard (by either contributing to margin erosion or potentially “wasting” free shipping offers where it may not be needed). Understanding why and how free shipping may drive the right types of customer behaviors and the desired outcomes, then developing a simple process of testing, measuring and adjusting those strategies as needed may be a good a place to start. Hopefully, some of the insights and ideas outlined in this article will help you do just that.