© 2013 GoECart Proprietary and Confidential. All Rights Reserved.
How to Survive and Thrive in the Era of
Free Shipping
Operations Summit 2013
Thurs, April 25, 2013
© 2013 GoECart Proprietary and Confidential. All Rights Reserved.
About Me and GoECart
Founded in Feb 2000
Hundreds of Clients ranging from small- and medium- sized
businesses to Fortune 500 companies
Committed to Product Innovation and Client Success
(3 patents awarded, 3 pending)
2013 SIIA CODiE Finalist for “Best Commerce Solution”
Featured as a Leading Vendor in Forrester Research 2012 Guide
(Selecting Your Commerce Solution Across North America And EMEA)
2012 CQIA Gold Innovation Prize Winner
2013 Stevie Awards Gold Winner for Best Customer Service
Thought Leadership Recognized By Industry Experts:
© 2013 GoECart Proprietary and Confidential. All Rights Reserved.
US Online Retail Forecast
© 2013 GoECart Proprietary and Confidential. All Rights Reserved.
Ecommerce Forecast Highlights
$202 Billion in 2011
$226 Billion in 2012
$327 Billion in 2016
10.1%+ CAGR from 2011 - 2016
167 million people (53% of US population) purchased
something online in 2011
192 million people (56% of US population) WILL purchase
something online in 2016
$1,207 average yearly online spending in 2011
$1,738 average yearly online spending in 2016.
© 2013 GoECart Proprietary and Confidential. All Rights Reserved.
Customers are connecting with brands
and retailers differently
More than 50% of mobile phones are now smartphones
Tablet ownership reached 19% of adult population
68% of online adults have a facebook account; including over
50% of adults over age 68
56% of social networkers have liked, followed or became fan
of a brand, product or company
© 2013 GoECart Proprietary and Confidential. All Rights Reserved.
Who are Shopping Cart Abandoners?
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Why are they abandoning?
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Top Reasons for Shopping Cart Abandonment
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Delivery Time and Abandoned Carts
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Options Online Shoppers Want to See
© 2013 GoECart Proprietary and Confidential. All Rights Reserved.
Free shipping program stats and trends
23% said high shipping costs discouraged them from making a purchase
43% abandon their shopping carts when they find high shipping charges
at checkout
60% said free shipping was a “very important” factor
75% prefer to shop with merchants offering free shipping
90% said free shipping offers entice them to spend more
50% indicated free shipping offers made it more likely they would shop
online
72% would switch merchants for free shipping
© 2013 GoECart Proprietary and Confidential. All Rights Reserved.
8 types of free shipping offers
1. Total Free Shipping
2. Free Shipping With Membership
3. Minimum Order Shipping
4. Select Item Shipping
5. Site to Store Shipping
6. Free Return Shipping
7. Flat Rate Shipping
8. Free Shipping by Delivery Location
© 2013 GoECart Proprietary and Confidential. All Rights Reserved.
Pros of Free Shipping
1. Increased sales
2. Increased traffic
3. Move more inventory quickly
4. A competitive edge over those not offering free shipping
5. Gained prominence in search engines for the term "free
shipping" plus whatever item you are selling
6. Higher seller feedback score and higher star ratings
7. Less abandoned shopping carts
8. Can help build referrals through word of mouth and social
media praise
© 2013 GoECart Proprietary and Confidential. All Rights Reserved.
Cons of Free Shipping
1. Product prices will be higher
2. Lower profit margin
3. Possible decrease in traffic from higher prices
4. Advertising costs and time to promote the free shipping sales
5. Customers come to expect free shipping
6. Added expense for the retailer and might cause a reduction of
other services
7. Discourages In-Store impulse buys
8. Shoppers might not enter the checkout stage to see what
shipping and final costs would be
© 2013 GoECart Proprietary and Confidential. All Rights Reserved.
Ways to combat the free shipping dilemma
1. Include Shipping Charges in the Price of the Product
2. Free Shipping Threshold
3. Free Shipping Membership (e.g. ShopRunner, Amazon Prime)
4. Ship a Subset of Items for Free
5. Flat Rate Shipping (e.g. $4.99 per order)
6. Other Options
a. Explore all potential carriers and services including hybrid shipping (e.g. FedEx
SmartPost, InXpress, UPS Mail Innovations)
b. Ad supported shipping (e.g. AdShip)
c. Vendor discounted shipping
d. Pick up from store
e. Drop ship
f. Free upgrades
g. Audit your carrier bills or outsource it
h. Eliminate double shipping
© 2013 GoECart Proprietary and Confidential. All Rights Reserved.
Ways to combat the free shipping dilemma
7. Rate Shop
8. Use Air Delivery Only if Necessary
9. Monitor DIM, Oversize Charges
10. Use Rewards Cards for Payments
11. Process Electronically
12. For Freight Shipments, Use a Broker
13. Seek Group Discounts
14. Request Discounts on Supplies
15. Watch for Billing Errors
16. Consider Outsourcing
© 2013 GoECart Proprietary and Confidential. All Rights Reserved.
Death of Free Shipping?
© 2013 GoECart Proprietary and Confidential. All Rights Reserved.
Welcome to GoECart360 The Ultimate All-in-One Multi-Channel Ecommerce Suite
© 2013 GoECart Proprietary and Confidential. All Rights Reserved.
Ray Miller
Founded My Wedding Reception Ideas.com in 2003
GoECart Merchant since 2003
E-commerce business built on supplier drop ship
business model
15 Suppliers across the U.S. and Canada
© 2013 GoECart Proprietary and Confidential. All Rights Reserved.
Competing In a Free Shipping Market
1. Increase product markup to offset shipping cost
2. Offer free shipping on order values over $100.00 (dollar
amount example) – No increase in product markup
3. Free shipping with no additional product markup
© 2013 GoECart Proprietary and Confidential. All Rights Reserved.
Free Shipping Promotion Challenges
1. Increasing shipping rates
2. Lower profit margin
3. No control over shipping costs with drop ship business
model a. Suppliers charging published ship rates
b. Supplier drop ship fees
4. Multiple item orders shipping from multiple warehouses
© 2013 GoECart Proprietary and Confidential. All Rights Reserved.
Our Solutions to the Free Shipping Dilemma
Focus on converting sales without free shipping promotions
• Competitive product prices every day – no promotions
• Publish and charge real-time shipping costs
• Use of Unique Value Propositions to sell our strengths
• Customer testimonials
• Easy web site navigation
• Easy ordering process
• Great Customer service before, during and after the sale
© 2013 GoECart Proprietary and Confidential. All Rights Reserved.
Thank You!
Manish Chowdhary
Founder & CEO, GoECart
Toll-Free: 877-243-3612
Email: [email protected]
Twitter: @goecart
www.GoECart.com
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