Shipping software company Shippo just released its annual report on the state of shipping in 2023. It found customers value free shipping above other perks and discounts, while retailers remain concerned about the costs of shipping.
“The data our report uncovers confirms the growing discrepancies between what consumers want and what ecommerce merchants are delivering,” Shippo CEO Laura Behrens Wu said in a press release. “It’s clear the economy is the primary driving factor for these concerns, as supply chain disruptions, decreased capacity and labor constraints take a backseat.”
Results are based on a survey of 1,191 ecommerce retailers across apparel, food, jewelry and electronics, and responses from 1,000 shoppers in November and December 2023.
Prices are the biggest factor
The cost of shipping remains a key factor for both consumers and retailers.
62% of shoppers said they won’t consider purchasing from a retailer that doesn’t offer free shipping. Another 35% said they prefer it, and just 3% of consumers said they don’t care about shipping costs. Digital Commerce 360’s August 2022 consumer poll had similar findings. 76% of the 1,116 consumers surveyed ranked free shipping one of the three most important factors in online shopping, more than any other option. Delivery speed was a distant second place at 43%.
Customers are willing to make concessions to reach free shipping. According to Shippo’s data, 42% are willing to join a loyalty or membership program to get free shipping. Nearly half, 47%, said they would add products to meet a minimum cost threshold for free shipping.
Shoppers overwhelmingly prefer free shipping to fast shipping, at 75% versus 25%. They ranked shipping cost as the most important information a retailer should share, over average shipping time, when the item will ship, and when it will likely be delivered.
Retailers cited the cost of shipping, too. 41% of respondents said shipping cost was their biggest challenge in 2022, more than any other response. About a third said it would be the most pressing challenge in 2023, while another 20% were more concerned about decreased consumer spending. Despite the costs, retailers largely offer free shipping.
Nearly three-quarters of retailers that rank in Digital Commerce 360’s Top 1000 database offered free shipping in 2021, though 45.1% of those retailers required customers to reach a minimum purchase threshold for the perk.
Consumers still value online shopping
Consumer survey responses indicate online shopping is still valuable for its convenience, according to Shippo’s data. 60% of respondents said they do at least half their shopping online, a significant increase from just 41% in 2021.
61% of shoppers prefer online shopping over visiting a store when they have the choice.
Consumers want as much information as possible
Survey results show ecommerce customers want as much data as retailers can share about their orders. 68% of surveyed customers want to be notified when a purchase has shipped, and 45% also want to know when an item is delivered.
Shoppers want to keep tabs on their purchase while it’s in transit. 59% of consumers say they want to receive shipping updates, and 39% track their orders once per day. Retailers largely comply with this desire from customers. 85% share some kind of tracking information, either through a branded link or through the shipping carrier’s service.
Consumers responding to the survey valued up-to-date information on their orders over fast shipping times. Just 10% of shoppers want same-day or next-day delivery, down from 18% in 2021.
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