Online Shipping Charges

According to a recent global survey conducted by The Nielsen Company, over 85 percent of the world’s online population has used the Internet to make a purchase, up 40 percent from two years ago, and more than half of Internet users are regular online shoppers, making online purchases at least once a month.
The history of Online Shopping has dramatically changed over the years, including how shipping charges have affected both consumers and businesses.
Shipping charges are the way that retailers and manufacturers offset their costs to ship to a consumer when a purchase is made online, over the phone, or through a mail-order catalog. Many companies add a margin increase to the actual shipping charges. Therefore, in many cases consumers can pay a significant charge to have their goods delivered. Not only have shipping charges increased globally for everyday mail, but they are continually increasing for online purchases.
According to the DMA (Direct Marketing Association) article on October 19, 2009, more consumers will shop online in the 2009 holiday season. This article also explores how shipping charges directly will influence consumers purchase decisions.
With the economic challenges in 2009, Online Shipping Charges is a primary focus and concern to consumers, as merchants try to nail down their business model so they can decrease shipping charges or eliminate them as an incentive for shopping on their site.
A recent study by paypal shows that 46% of US shoppers site high shipping charges as the number 1 reason for shopping cart abandonment.
FreeShipping.org posted a study on consumer habits of online shopping and online shipping charges, and how it affects their purchase decisions:
- 78% of online customers said prohibitive costs of shipping discouraged them from online purchases. (Source: E-tailing Group, 2008)
- 75% of people prefer to shop with online retailers that offer free shipping, compared to 61% in 2007. (Source: Forrester Research, 2008)
- Nearly 60% of respondents said free shipping was a “very important” factor in their decision to shop online. (Source: BIGresearch Survey)
- 61 of the largest 100 online retailers offered free shipping as of the week of Monday, Nov. 10, 2008. (Source: Internet Retailer)
- 60% of respondents indicated that free shipping was a reason they were more likely to shop online. (Source: Harris Interactive Survey, 2008)
- 90% of respondents said free shipping offers would entice them to spend more online. (Source: The Conference Board Survey, 2008)
- 72% of consumers said that if an e-commerce site eliminated free shipping, they would use another e-commerce site that did offer free shipping. (Source: comScore Survey, 2008)
Online shipping charges are probably not going to go away. As we have seen postal increases simultaneously in 2006, 2007, 2008, and 2009 and anticipate an additional increase in 2010, directly affecting shipping charges and online purchases.
With that in mind, free shipping or discounted shipping offers are now common on the internet as an incentive to have more people complete a purchase. Companies like Newport News will send a Free Shipping code included in the member catalog received in the mail and you can use this for your online purchase with them. Victoria Secret often runs promotions that guarantee Free Shipping over a certain total order price. And FreeShipping.com offers a membership program where consumers join their club, and receive free shipping rebates for their online shipping charges for purchases made through their site. There are over 1,000 online merchants that participate in this program which demonstrates the popularity and value of finding a way to decrease online shipping charges.
Coupons, promotions, free shipping, and special offers around online shipping charges is the buzz as shipping charges increase, and consumers shopping habits trend upwards online.
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