9 Strategies: How to Reduce Cart Abandonment Rate with Free Shipping?

70% of customers abandon their shopping cart during the checkout process. That’s $18 billion worth of revenue lost every year.

48% of cart abandonment is due to high shipping costs.

93% of online buyers tend to buy more when free shipping is offered.

In this article, you will learn 9 effective free shipping strategies to reduce cart abandonment in your Shopify store.

Reasons for Cart Abandonment

As per Baymard institute, the most important reason for customers to abandon their cart is higher shipping costs that they see during the checkout process.

Studies have shown that offering free shipping can boost sales and significantly increase conversion rates and average order value (AOV). 

It is reported that 93% of the customers will place large orders when offered free shipping. 

You too can use free shipping as an effective strategy to reduce cart abandonment in your Shopify store. 

Benefits of Free Shipping: Top 4

Besides reducing the cart abandonment rates, free shipping can also have added advantages.

1. Free shipping boosts sales: It incentivizes customers to add more items to their cart.
2. Increases AOV: When customers add more products to the cart to be eligible for free shipping, it increases your AOV.
3. Improves customer satisfaction: It is an additional perk and customers appreciate the fact that they don’t have to pay any additional fees.
4. Boosts the brand perception: It can make your brand more trustworthy, competitive, and customer-friendly.

Points to consider when you offer free shipping

• Is it financially viable for your business? Ensure your shipping costs don't eat into your margin.
• Measure its effectiveness. Monitor your conversion rates, AOV and sales before and after implementing it.
• A/B test different strategies: Experiment with different free shipping minimums, thresholds, and promotions to find what works best for your audience.

Here are 9 Effective Ways to Offer Free Shipping in Your Shopify Store to Reduce Cart Abandonment 

1. Offer free shipping on all orders. Yes, really!

Offering free shipping on ALL orders is one of the most effective ways to reduce cart abandonment. Provided you’re not losing your margin. 

Typically, this works well for products that either make a lot of profit, are small in size, or don’t weigh much.

2. Spend a minimum amount and get free shipping!

For example: If a customer purchases above $50, offer them free shipping.

Have a progress bar that shows how much more they have to spend to get free shipping.

But remember to set your free shipping threshold about 15-30% above your minimum order value to avoid loss.

3. Offer free shipping on specific items

You can provide free shipping for selected high-cost, high-margin items such as beauty products and watches, while charging a minimal shipping fee for items like household items and hygiene products, which have a low margin.

4. It’s the holiday season, offer free shipping to boost sales

Offer free shipping on exclusive days like Valentine’s Day, Mother’s Day, Thanksgiving, Black Friday, Christmas, and New Year's Eve.
Leverage the increased shopping activity during the seasons and attract more customers by offering free shipping. 

5. Offer free shipping only to specific locations

Offering free shipping to all locations can make a hole in your pocket. 

Consider offering free shipping to certain states, provinces, cities or countries. 

Though it's not suitable for all your customers, it attracts a particular group of people.

You can also try storing your inventory somewhere closer which reduces carrier costs and aids in free shipping.

6. Offer free shipping only to Members/ Loyal customers

Offer free shipping only to your loyal customers or those who enrol in your membership program.
You can offer free shipping on some or all products that they buy. This will strengthen customer loyalty and manage shipping costs more efficiently.
It also encourages them to repeat their purchase and would extend your customer lifetime value.

7. Offer free shipping as a special treat

Certain shoppers may not meet the criteria for loyalty programs or minimum spending requirements.
In such cases, consider providing an occasional treat to address issues like cart abandonment.
For example, if a customer abandons the cart for some reason, trigger a free shipping coupon or email to bring the customer back and complete the sale.
Though you end up incurring the shipping cost here, you still earn some revenue compared to a lost conversion.

8. Free shipping on all items for a certain period

Offer free shipping for all items in your store over a certain period of time. It can be for a particular day in a week, or for an entire week. 

You can run a shipping promotion once in a month. This will push your customers to purchase items that they have been thinking of buying for a long time. 

9. Free shipping after certain number of items

For example, offer free shipping when the customer buys more than 3 items. When they add 1 item to their cart, prompt them with a message saying “Add 2 more items to be eligible for free shipping”.   

Most of the shoppers will add extra items to their cart to receive free shipping. 

This type of shipping will boost the average number of items per order. 

Wharton reveals that an average consumer will increase their spend on an order by 30% to get free shipping.

You can follow the above mentioned methods to offer free shipping, improve your cart rate and reverse abandoned carts in time. 

By implementing free shipping effectively, you can significantly reduce cart abandonment and improve your Shopify store's overall performance.

Is Free Shipping Possible for Every Store Owner?

Free shipping is a marketing tactic and pricing strategy, not a service being provided. Of course, it is an effective but costly sales tool. 

Unfortunately, this tool cannot be used in all stores or all products considering financial sustainability.

Costs and margins, product pricing, logistical challenges, and international shipping are some of the factors which can stop a store owner from providing free shipping.

• Costs and margins – Incurring the shipping cost for every order can significantly impact the profit margins. 
• Product pricing – To balance the shipping expense, you might need to increase the price of the products which makes the product less competitive in the market.
• Logistical challenges – Shipping cost varies based on factors like size, weight, dimension, etc. Offering free shipping to large or heavy items and distant locations can bring a financial strain.
• International shipping -This can be challenging due to higher shipping costs and custom fees. This involves complex logistics and regulations.

Common Mistakes while Offering Free Shipping

Using this as the only promotional offer

What should you do instead?

Experiment with different promotional strategies, such as "Buy 1, Get 1 Free" or "Enjoy a 30% discount on your entire order," to determine the most effective approach for your store. 

Give customers a choice between offers, such as free shipping or an alternative promotion, to identify the most popular one.

Using it during all seasons

What should you do instead?

Do not offer free shipping year around. It will cost you more. Instead, offer it during times when your business is dull, or when you do not have any other promotional offers.

Keeping your minimum qualifying purchase too high

What should you do instead?

Keep your minimum order value 10-15% higher than the average order size. Customers will always add an extra item to get free shipping when the minimum qualifying purchase amount is not too high than the actual cost of the product they want.

Not assessing the costs of free shipping

What should you do instead?

Shipping is free for the customers but not for you. Assess the cost of shipping before you offer to your customers. You can also set a minimum purchase for free shipping to ensure shipping costs are sufficiently covered.

Not reminding your customers how much they are saving 

What should you do instead?

Let your customers know how much they are saving. This will bring an actual quantitative perspective in the customer’s mind.

Can’t Offer Free Shipping? We have 2 Solutions.

1. Flat rate shipping
2. Customized shipping

Solution 1: Flat Rate Shipping

If you find it challenging to offer free shipping using the strategies mentioned above, consider offering flat-rate shipping to your customers.
With flat-rate shipping, there's a fixed cost, regardless of the package's size, weight, or the distance it needs to travel. As long as the items fit into the box provided by the carrier service, it's okay to add that many into it.
This consistent pricing provides customers with a straightforward and predictable shipping fee.

It works particularly well when dealing with relatively uniform-sized products or items with similar shipping costs.

Solution 2: Customized Shipping Rates with Shipeasy

When you cannot offer free shipping or justify increasing the product price to match the shipping rates, you may opt for budget shipping or customize your shipping rates.

This can be done based on various factors like weight, distance, dimension, cart value, cart quantity, location, customers, etc.

The rate customization can be done using Shipeasy – a shipping rate calculator by Logbase. 

This app can help you customize shipping rates by applying various conditions suitable for your store and fulfil all your shipping needs.

It’s your turn now.

How are you going to use free shipping to reduce cart abandonment?

• Are you going to offer it to all customers or only to your loyal ones?
• Are you going to offer it on all products or only on selected products?
• Are you mindful of the cost implication of offering free shipping?

Let us know how it goes. 

Hope it helps attract and retain your customers and in turn increases your sales and average order value.