High Shipping Costs Can Cause a 63% Reduction in eCommerce Sales

Applying high shipping costs to your products can cause almost two-thirds of customers to walk away from an online sale, according to new research by Feefo.

The recent survey, by online review platform Feefo, has revealed that online businesses experience a 63% reduction in eCommerce sales as a result of high shipping costs on their items.

In addition, 79% of the study’s respondents revealed that they have previously abandoned an online shopping cart before they have completed a purchase as a result of such factors. Meanwhile, many others may not even reach the stage of adding to their cart if they are put off by shipping prices.

All this implies sellers to focus on shipping costs reduction. If you ship products locally, it’s easier to take control of shipping prices. But let’s say you need to send a parcel to Poland from the States, and suddenly, cutting shipping costs gets more complicated. 

The research suggests that there are a number of steps that lead to consumers making a buying decision. According to the study, 70% of consumers go online to search as soon as they want to buy something, and 79% of all online shoppers visit Google (41%) or Amazon (38%) the minute they decide they want to buy something.

According to Richard Tank, Head of Digital at Feefo, prices are a significant factor for many buyers, often dictating their initial choice of online business when considering multiple options, including the ‘big two’: Google and Amazon. However, brand values such as product quality and customer service can impact on the financial decision made by online shoppers.

‘Today’s digital landscape is ever-changing and businesses have to meet the needs of their customers across the whole purchase journey in order to maintain sales and brand loyalty.

The Feefo survey of 2,000 UK adults identified many different ticks and behaviours displayed throughout the purchase journey. According to the results of the study, 82% of respondents feel that price is the most important consideration. However, 28% favour product quality and just over half allow a company’s brand values to influence them when they are considering a purchase.

‘Consumer confidence and trust is essential to developing an online business that grows, and lasts,’ Tank commented. “Brands small and large must do everything they can to build relationships with their customers, to ensure they keep coming back for more.’

Tank added that companies should listen to their customers to develop a more personalised experience throughout the purchase journey, from flexible pricing to greater engagement post-purchase. ‘Technology as an enabler, must be fully utilised in order for online businesses to achieve this,’ he noted.

The views expressed in this article are those of the authors and do not necessarily reflect the views or policies of The World Financial Review.