Shipping Options Driving Consumer Purchases

How companies leverage and manage shipping costs and returns will be a big factor in this year’s holiday sales.

Consumers consider shipping options—including free shipping—to be an important factor in their overall shopping experience, according to 80 percent of those responding to a recent survey commissioned by Pitney Bowes Inc. The survey polled consumers on attitudes toward shipping through all channels, including in store, online, catalog, and phone (See other results by clicking on the infographic thumbnail below).

Shipping Matters [Infographic]

“Shipping has become a considerable factor in consumers’ buying choices,” said Jim Hendrickson, vice president and general manager of shipping solutions, Pitney Bowes. “In fact, there’s now a blurred line between the decision on a shipping method and the selection of a product when it comes to the overall buying decision.”

The survey found free shipping is by far more important to Americans surveyed over fast shipping (77 percent vs. 19 percent). That number spikes further among those who’ve shipped a purchase in the last year (82 percent vs. 16 percent, respectively). 

The National Retail Federation forecasts holiday sales will rise 3.9 percent to $602.1 billion—a slight improvement from last year. eMarketer projects 2013 U.S. retail ecommerce holiday season sales will to grow about 15.1 percent to $61.8 billion, up from $53.7 billion in 2012. With that, the Pitney Bowes survey found nearly half of Americans (47 percent) are paying more attention to shipping as part of the overall shopping experience now compared to three years ago.   

With access to goods from many sources, consumers are prepared to walk away from a purchase if presented with excessive shipping costs. And, they do.

Among those surveyed, half (49 percent) have at some time abandoned their shopping cart, whether online, in store, or over the phone, due to shipping costs. On average, the threshold for abandoning a purchase occurs when shipping fees are $20 or more.  Men have a higher threshold for cost, with $24 for shipping being the average tipping point.

“For retailers, how they leverage and manage their shipping costs and returns process and how they use that in creating an experience for their client is going to be a big factor in their sales this holiday season,” said Hendrickson. “Retailers need to be thinking: How do I manage my shipping costs out of ecommerce so I can ultimately give my client a lower cost for shipping or give it to them for free? The entire purchase experience is what matters to the buyer today.”

While 9 in 10 (89 percent) of Americans have made an online purchase at some point this year, only half (46 percent) those surveyed have returned a package through the mail. “Simplifying the return process with enclosed return mailing envelopes, free shipping, prepared labels and generous return policies are all part of what the consumer now expects,” Hendrickson added.

The survey found that 81 percent of consumers who made a purchase requiring shipping in the last year have tracked a package, with 30 percent tracking once or twice, 21 percent tracking 3-5 times and 30 percent tracking 6 or more times.

About the Study

Pitney Bowes’ results are based on the findings of a telephone survey conducted with 1,005 adults 18 years of age and older, living in the continental United States. Interviewing for this survey was completed by ORC International in October 2013. Margin of error for total respondents is +/- 3.1 percent at the 95 percent confidence level. 

 

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