Sellers are increasingly offering free shipping in a bid to up their delivery offering but see shoppers returning more, says new research by DynamicAction.
This reverse effect puts a question mark on whether free shipping facilitates the emerging trend of serial-returners and whether delivery costs somewhat cap returns due to its additional investment which makes shoppers think twice about sending back a product?
The study analysed about €11 billion of online consumer transactions from the start of this year until the 15th of April, as reported earlier by the Ecommerce News Europe. It aimed to highlight the link between the free shipping options and the growing number of returns across European markets.
‘Consumers buy multiple products with intent to return some’
According to the study, the number of returns in Europe has soared up by 8% in comparison to last year’s findings. At the same time, free shipping is on the rise, with a 3% growth on the year-on-year (YoY) basis. This means that sellers are actively honing their delivery offering in an ongoing bid to attract shoppers.
The report interprets the phenomenon as the rise of serial-returning – “a growing trend from consumers to buy multiple products online with the intent of returning some items”.
Meanwhile, products purchased using a short-term promotion have risen by 29% on the YoY rate. Sellers are progressively using short-lived strategies such as one-day sales as an added incentive to convert more shoppers to spend.
Balance customer lifetime initiatives over immediate sales
The short-term promotions coupled with free delivery creates an imbalance between convenience and impact on the margins. It’s understandable that sellers aim to outmanoeuvre the competition by staying in-tact with the latest customer service trends.
However, the report says that this often opens leeway to the influx of returns. The added convenience of free delivery can entice shoppers to buy more but return more at the same time. On the other hand, the delivery cost can make it less likely that shoppers buy products they might not necessarily want.
While some merchants can afford free delivery as a customer convenience luxury, others can find this unsustainable for their bottom line. Merchants need to focus on prioritising customer lifetime value over immediate sales so that their efforts justify the investment into customer demands.