The Role of Shipping Costs in E-Commerce Conversion Rate Optimization

Every aspect of your online store can play a role in conversions, from big navigation redesigns to smaller changes like color schemes. So it’s no surprise when you recognize that your store’s entire checkout procedures will take some sprucing up to help with your CRO strategy. But besides streamlining your process, cutting away unnecessary checkout elements, and providing multiple payment options, there’s another stage you can’t neglect: your shipping costs.

How Shipping Costs Affect Conversion Rates

Shipping is a core aspect of online shopping; otherwise, there’d be no way for customers to receive their items. From a business owner perspective, you need to calculate shipping costs into your budget – and sometimes it may seem like the only way to cover these costs is by making your customers carry them.

While many customers understand that there’s some cost of shipping, they often don’t want to pay it. In fact, most online shoppers consider free shipping a major influence in whether they complete a purchase or not. Free shipping can even encourage more purchases, boosting both your conversions and income.

On the other hand, mandatory shipping costs (especially expensive ones) often contribute to cart abandonment. Seeing the price jump when a customer is about to check out is an almost surefire way to scare them into cart abandonment or not returning to your site for another purchase. You’ll still get conversions, of course, but there won’t be as many as you want.

Even incredibly low shipping costs aren’t as effective in driving conversions as free shipping is. At this point, free shipping for online shopping is almost the standard in customer’s minds. Don’t lose out on potential conversions at the last minute because your site doesn’t match that expectation. To learn more about how shipping costs are affecting your conversion rates on your Magento website, reach out to the Magento ongoing support team.

Shipping Cost Best Practices

Since shipping costs are such an essential part of your CRO strategy, you obviously want to adjust your website to incorporate best practices. So, what are they?

• Offer free shipping. The best thing you can do is have free shipping on your store. Many e-commerce websites find that the increase in conversions more than covers the shipping costs.
• Offer free shipping – at a certain price point. Many customers are willing to add a few more items to their cart if it means no shipping costs, even if the end price is the same for them. If you use this strategy, be upfront about what your free shipping threshold is.
• Display any shipping costs up front. If you absolutely cannot provide free shipping, then you need to at least display your shipping costs upfront, whether they be flat rate or variable. Having your cart total include the shipping cost from the start eliminates the surprise of a price hike for your customers.

Of course, you should have no problems with charging for priority shipping, but not giving the option for even the most basic shipping methods is dangerous for your CRO strategy. Always keep your customers aware of your shipping policies to increase conversions on your Magento website and reach out to the Magento managed services team at Forix to learn more.

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