Free Shipping Worth More Than A Bigger Discount
from the more-powerful-than-you-might-think dept
For years, there have been controversies (especially among financial types) over whether or not e-commerce shops should offer free shipping, especially as some fear that it takes too big a bite out of the bottom line. However, there's more to free shipping than just the saved money. Researchers are finally starting to look at the psychological draw of free shipping deals. It turns out that people are much happier with free shipping deals than if they just got a discount. There's just something about getting free shipping that feels right -- which could explain why some people get upset when they feel the free shipping is really a bait and switch offer. This points at an issue that isn't really covered in the original article. One of the reasons why people like free shipping so much is that they don't feel tricked at the end of a purchase. Too often, online retailers hide excessive shipping and handling fees and only make them show up at the end. This makes people feel tricked. They were promised one price, but really given another. Offering free shipping makes people feel comfortable that the price they see is actually what they'll pay -- and that comfort level seems to have a clear value to customers. Among retailers, Amazon has clearly realized this. Not only have they resisted pressure from investors to ditch their free shipping policies (on certain orders), but they even came up with a system to get people to pay a flat annual fee to guarantee "free" express shipping. What Amazon realized is that "free" shipping isn't just about not paying as much money (as odd as that sounds), but about the comfort level of customers.