Whether browsing for shoes or fabulous clothes or even rare collectibles, the Internet continues to revolutionize the way customers make purchasing decisions. Amazon, the world’s largest online shopping hub, fundamentally changed the way customers spend their money by allowing them to shop until they drop without even leaving their house.
Originally conceived as an online book retailer, Amazon now stands at the forefront of online retail, setting standards for other companies to follow. As an online retailer, you need to take a page from Amazon’s book to attract and retain customers. While you may not be able to outmatch Amazon, you can still spark more conversions by offering customers perks like discounts and free shipping. Let’s explore how you can take advantage of these two incentives to see more sales and higher customer satisfaction.
Driving Transactions Through Discounts
Whether a discount reduces a bill by 5 cents or 5 dollars, smart shoppers appreciate a good deal. Flagship Research conducted a study to show that millennials prefer online discounts to free shopping. The numbers are in and 34% of respondents aged 25-34 want a discount for an online purchase, while only 18.5% preferred free shipping to online discounts.
While business owners should take the results of this study with a grain of salt, these findings are great news if millennials make up your target audience. Millennials already have an estimated $600 billion in purchasing power, and that amount will continue to rapidly increase. As a result, you should consider adjusting your strategy to include occasional discounts. Like a drop of blood attracting a hungry great white shark, millennials will flock to your website in the masses if they spot a worthwhile deal.
You have an unlimited amount of options when it comes to extending exclusive offers, discounts, coupons and deals. Let’s take a look at some of the most popular discount practices for online retailers:
Customer Loyalty Points: Rewarding purchases can help strengthen the bond between brand and customer. You don’t need to offer anything overly extravagant. A 25% discount or $5 birthday credit is more than enough to keep some customers coming back for more.
First-Time Shopper Discount: Some customers need extra encouragement to make their first purchase. Make their decision easier with offers they can’t resist passing up.
Referral Promos: Word-of-Mouth marketing is still an effective method to reach new audiences. Encourage your customers to refer a friend or family member with a discount on their next purchase.
Social Media Follow Incentives: Social media is a great tool to market to the masses. But to truly harness social media’s power, you need to first build your following. You can attract new followers by offering social media-specific deals.
Build Loyalty Through Free Shipping
Understanding the appeal of free shipping isn’t a difficult concept. The majority of consumers turn to online shopping for two reasons: convenience and price. In most cases, shipping costs rack up the final bill. Consumers are always searching for clever ways to save a buck, and they have no qualms against taking their checkbooks to a business that offers free shipping.
Flagship Research reported 69% of baby boomers listed paying for shipping as a pet peeve when arriving at check out. Furthermore, 58% of consumers reported cart abandonment when checking out. It’s not hard to understand the cause; the shipping fees increased the cost of the product than they originally believed. No matter how you look at it, free shipping usually determines whether or not your business lands that conversion. So if baby boomers make up your audience, then you need to think about implementing free shipping rather than offering discounts.
Discounts or Free Shipping? Which is Better?
So which perk should you choose? Unfortunately, there isn’t a clear-cut, definitive answer because it depends on circumstance. What does your audience want? Regardless of your choice, the end goal remains the same. Both discounts and free shipping help reinforce a customer’s belief that they’re saving money so that they can spend more, whether on the same order or future transactions.