Get your delivery strategy right

Fixed price shipping.

To be able to provide the customer with the shipping rate as early as possible in the checkout process, or preferably on the product page itself, we recommend having a fixed shipping price. Instead of hiding the shipping cost, turn it into a selling point. If you are unable to have such a fixed price due to the type of goods you sell, at least give the customer a 'shipping from' amount to give the customer a heads up.

Free shipping?

Online customers have increasingly higher demands for online shopping and you need to understand them. The U.S. online shoe retailer Zappos gets a lot of attention with their policy of free deliveries and returns, and in Europe the e-commerce site Zalando offers the same. Zalando was founded in 2008 as a shoe retailer in Germany and one year later, they started to expand abroad. Today they not only sell shoes, but also clothing, sport apparel, accessories, premium merchandise, and stock a range of products from different well-known brands and labels. Zalando chose to use a “universal” free delivery and return service as a strategy to drive their sales - regardless of the amount spent.

Free shipping above a given amount or graded shipping cost

If outright free shipping is not an option, consider free shipping when the cart reaches a certain amount. Nelly.com is an example of this as they offer a fixed shipping cost on orders less than €50, and free delivery on orders over this amount. This motivates customers to add an extra item into the shopping bag, and drives more sales. For this to work you need to be clear about how much the customers have to spend to get free delivery, and make sure to give them a notification when they are approaching the amount for getting free delivery.

Another take on this is to offer free shipping when the customers order two or more items like swims.com does.

Shipping cost based on shipping size and distance

For some types of goods you have no option but to charge based on shipping size and distance. If that is the case, make it easy to calculate the cost as early as possible. Ikea lets you calculate cost early by asking for your postcode/ZIP code in the shopping cart view. If you decide to use this strategy, be careful to hold the cost at a level that customers are willing to pay.

New ways of distribution: Package delivery with your morning newspaper

The startup Helthjem.no delivers products directly to your doorstep early in the morning, six days a week by piggybacking on the newspaper delivery routes. Customers can track the package online and receive an SMS when the package is delivered. If a customer would like to return an item, he or she orders a return online, packs the package and places it outside the door in the evening and Helthjem will collect it from the house in the early morning.

Furthermore, companies use offline stores more and more as a pickup point and also a point of returning deliveries. Target.com uses this method as one of their delivery options where the customers choose 'pickup' as their delivery method. Orders placed before 7pm will be packed and ready within 2 hours, orders after 7pm will be available next business day, and orders placed on a closed day will be ready on the next working day - two hours after opening time. However, packages that are not collected within 4 days will be put back to the shelf (http://www.target.com/c/store-pickup/-/N-55fqz). Target offers this service free of charge. In Europe, this method grows as companies increasingly integrate offline business with online.

Furthermore, having a good return policy will increase the satisfaction of online shoppers and perceived product quality. 66% of customers check the return policy before they shop online (http://www.websitemagazine.com/content/blogs/posts/archive/2014/07/21/9-shipping-amp-return-strategies-to-know.aspx). Therefore, you need to clearly communicate the return policy from the beginning of a session, so the customer knows what to expect. Many companies often put this information on the top of a website. To make the return policy even more attractive for the customers, extend them during holidays or create special campaign offers online. In addition, avoid any confusions and be clear about who is responsible for the returns and costs, if it is the customers, the company or a third party.

Fear not the returns to brick and mortar stores.

There is no reason to fear returns on items bought online to your offline stores. As a wise man once said; Try to see it as an opportunity. Sure, you have the hassle of registering the purchase and return in your systems. However, getting the customer into your physical store allows you to upsell. 'Sure, we'll take this item back! What would you like instead?' A good salesperson will have the customer leave with more value in the bag than what he came in with. Or at least the customer will have a good feeling, knowing that purchases from your store are risk-free.

If you deny the customers returns to your store, then the only thing you gain is guaranteed dissatisfaction, and less likely that they will ever purchase from you again.

In conclusion, the delivery strategy and return policies are important parts of the shopping process and directly affect your conversion rate. It should not be seen only as a necessity at the end of a checkout process. It is a service and it should be smooth for the customer without any additional thinking, otherwise companies will lose a high number of sales every year. Choose a strategy that best relates to your products and customers and make the information clear to see on the website to avoid any confusions related to the shipping and return method.

Best of luck!