E-commerce merchants know that package delivery costs can significantly influence customer purchasing decisions. Therefore, it's important to carefully consider how to price delivery methods in your online store. In this article, we share tips for pricing delivery methods that attract customers and support your business.
E-commerce and Delivery Methods: The Importance of Integration
Before diving into pricing details, remember that delivery methods are an essential part of e-commerce. By offering diverse options, you can meet the needs of different customers.
- Well-organized deliveries, such as home delivery punctuality, customer returns, customer communication, and pickup point efficiency are directly visible services to the customer that affect their perception of the online store, even if they are services provided by different operators. In e-commerce, every component must work together - that creates a unified customer experience, says Sami Hakanen, Chief Operating Officer at Shipit.
Price and Customer Experience: Finding the Balance
Balance is key in pricing. Too high delivery costs can cause customers to abandon their shopping carts, while too low costs can reduce profitability. Therefore, it's important to monitor costs and competitor prices.
- However, remember that large online stores can compete with lower delivery costs due to their large offering, so don't blindly compare prices, as large operators can afford to take a small "hit" on delivery costs or have part of the delivery costs embedded in the product price. Consider if you could also allocate some of the delivery costs to your product price, but without making the product price itself too high, Hakanen notes.
It's also worth considering the actual product you're selling in your online store.
Is the product an impulse purchase or carefully considered?
- For example, with clothing, affordable or even free delivery costs might be a decisive factor when the customer reaches your checkout, while a carefully considered elderly care aid might not need free delivery, but rather fast or even home delivery, and the delivery cost can thus be slightly higher, Hakanen reminds.
Clarity and Transparency: Customers Appreciate Clear Delivery Costs
When a customer is placing an order, it's important that delivery options and costs are presented well in advance, preferably before reaching the checkout. If a customer is surprised by high delivery charges only at order confirmation, they may change their mind. This can also leave a negative shopping experience and increase the threshold to return to the online store.
Versatility as Part of Customer Experience: Don't Limit Deliveries to One Carrier's Services
Let customers define where they want their order delivered, saving time and effort. Diverse options improve conversion and are an important advantage that can prevent shopping cart abandonment.
- Research shows that customers value the ability to choose their preferred pickup point and delivery method, especially in sparsely populated areas where one carrier's pickup point might be far away and another's nearby, advises Hakanen.
Delivery Tracking and Customer Service: Build Trust with Customers
An important part of successful delivery method pricing is customer service and delivery tracking. Customers value the ability to track their packages in real-time. Ensure you provide this service and keep your customers updated on delivery progress.
You can communicate with your customers for example
Order confirmation - Thank you for your order! We have received your order and its estimated delivery time is x-x. We'll send you a delivery confirmation when we get your order on its way.
We have sent your order and it will arrive within the next x days. You can track your order (tracking code).This way your customer always knows where their order is, which builds trust between the customer and the online store and encourages customers to return to the store.
Delivery Methods in Marketing: Utilize Social Media and Newsletters
You can also use delivery speed and/or versatility in marketing. For example, you can communicate that when ordering by x o'clock, the order will be dispatched from our warehouse the same day. Or you can inform your customers that you offer diverse pickup point, locker, and home delivery options, allowing customers to choose their preferred/most convenient option.
Conclusion
When pricing delivery methods in your online store, remember that they are part of the customer experience.
- Competitive advantage is achieved by offering clear, diverse, and competitive delivery costs along with real-time order tracking. This not only attracts customers but also supports your business profitability and increases conversions, summarizes Hakanen.
If you're looking for more advice on pricing delivery methods in e-commerce, don't hesitate to contact us and let us help you!
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