Gifts retailer UncommonGoods charges $15 a year for unlimited free shipping. Nearly 5% of customers have signed up, and they purchase again more often than other customers. The e-retailer also has improved conversion rate by blocking malware that diverts website visitors to competing ecommerce sites.

Two initiatives implemented in the past year are increasing sales for UncommonGoods LLC, an online retailer of gift items.

In response to customer requests for free shipping, the online retailer last October introduced a program called Uncommon Perks that offers free shipping to shoppers who pay a $15 annual fee. And, after realizing that malware on the computers of many consumers was costing it sales, UncommonGoods deployed technology that blocks the malicious code, driving an uptick in conversion rate.

Just the increasing arms race with Amazon and trying to be competitive with them, we wanted to find a way to offer something that would rival their free shipping.
Brian Hashemi, director of marketing, UncommonGoods

The retailer introduced the free shipping program in October 2018 in an attempt to balance customer demand for free shipping with the reality that “our shipping costs are more than our profit for the year,” says Brian Hashemi, director of marketing at UncommonGoods. “If we can get people to put something into a program, that makes it feasible for us.”

And he says the retailer was trying to counter the allure of Amazon.com Inc.’s Prime program, which offers free shipping and other perks, such as free streaming video and music, for an annual fee of $119. “Just the increasing arms race with Amazon and trying to be competitive with them, we wanted to find a way to offer something that would rival their free shipping,” he says.

The online merchant has marketed the Uncommon Perks in a variety of ways, but most sign-ups come when customers reach the checkout page and are offered the $15 program as an alternative to paying for shipping of their order.

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Hashemi says UncommonGoods sets a goal of signing up 5% of its customers for the program, and, after nine months, is close to reaching that goal.

Those customers who sign up purchase again from UncommonGoods at a rate 200% higher than that of other buyers, Hashemi says. While he recognizes the program is not entirely responsible for that increased loyalty—customers who regularly buy from the retailer are naturally more inclined to sign up for the free shipping program—he does think the program has increased repeat purchasing.

Other retailers’ shipping policies

UncommonGoods is not alone in offering customers a Prime-like free shipping program. Customizable apparel retailer Zazzle Inc. has a program called Z Black, which provides free standard shipping for $9.95 a year and free two-day shipping for an annual fee of $39.95. Walmart Inc. in May 2015 introduced a $49-a-year free shipping program called ShippingPass, but discontinued it in January 2017 when it began offering free two-day shipping on all orders of $35 or more.

Among all retailers listed in Internet Retailer’s Top 1000 ranking of the leading online retailers in North America by web sales, 17.0% offer free shipping on all orders and another 40.7% on orders above a certain order amount. Another 9.2% offer free shipping to consumers who sign up for the retailer’s loyalty program or credit card, or for a paid membership program like Prime or Uncommon Perks.

Amazon is No. 1 in the 2019 Internet Retailer Top 1000, Walmart is No. 3 and Zazzle is No. 202. UncommonGoods is not ranked.

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Nefarious ads on ecommerce sites

The other project that has paid off for UncommonGoods is implementing a service from Namogoo Technologies Ltd. that blocks competing ads from appearing when shoppers visit UncommonGoods.com.

Those ads appear when consumers—usually inadvertently—download software promoted by unscrupulous affiliate network operators to their browsers. When a consumer is visiting a product or category page on a retail site, this malware shows pop-up ads for the same product at a lower price on another website or a similar product offered by a competing retailer. Clicking on that ad takes the shopper to another ecommerce site. If she buys there, the affiliate network behind the malware gets paid a commission.

What makes this type of malware especially harmful is that the online retailer losing the sale doesn’t see this happen because the ad is driven through the browser on the consumer’s computer and is not really appearing on the retailer’s website. As a result, an e-retailer would have no way of knowing why the shopper left.

Namogoo says its experience with ecommerce clients suggests these malware-driven ads show up during 15-25% of retail website visits, and that’s in line with what UncommonGoods found. During a test period, it discovered that 18% of visits were from browsers infected with this kind of malware.

Namogoo’s technology detects and blocks these ads, keeping consumers from being lured away from UncommonGoods.com. Blocking those ads raises conversion rate among consumers whose computers are infected with this kind of malware by about 20%, Hashemi says, and has raised the site’s overall conversion rate by 3-4%.

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UncommonGoods can track the impact of Namogoo because it only runs 95% of website traffic through the Namogoo system, while allowing 5% to circumvent the blocking technology as a way of measuring its continued effectiveness. Hashemi says the percentage of traffic infected with malware varies but generally remains in the 15-20% range.

He would not say how much UncommonGoods pays for the Namogoo service. Namogoo says it charges a tiered fee that increases with a website’s traffic and that its service is generally geared to larger online retailers. Other clients include Office Depot Inc. (No. 19 in the Top 1000), Lenovo Group Ltd. (No. 27), Samsonite International S.A. (No. 152) and Dollar Shave Club (No. 160).

Implementing Namogoo was very easy, taking no more than two hours of a developer’s time for UncommonGoods, Hashemi says. “This was one of the highest ROI projects we’ve done in a long time,” he says.

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