Shipping: The Hidden Cost of Online Shopping
Online shopping is a convenient way for customers to seek out the best prices. But it is not as simple as one may think.
The consumer decision-making process consists of five stages:
- Need Recognition
- Information Search
- Evaluation of Alternatives
- Purchase Decision
- Purchase Evaluation
But what about the hidden costs of online shopping? How many of your customers make a purchase decision, accept the shopping cart total, only to close the web browser the moment they see the cost of shipping?
I know I do this on a regular basis, especially if the shipping cost is what I would consider inflated or unreasonable. Shipping isn’t something I enjoy paying for, because it doesn’t add anything of value to my order. I start the decision making process all over again, by reevaluating my “need” and searching for alternatives. I visit retailmenot.com seeking out free shipping coupon codes, google the product name + free shipping, or merely seek out a online store with a $5 flat shipping rate.
Many people feel that free shipping is a must in this economy:
In a recent comScore study, 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. Last week the LA Times reported that this year, nearly 80% of consumers said they were more likely to shop online with a retailer that offers free shipping, compared with 60% who said that last year.
Rich Whittle on July 22nd, 2009 8:32 pm
In your post you state, “Shipping isn’t something I enjoy paying for, because it doesn’t add anything of value to my order.”
Do you value your time? How about your car? car maintenance, insurance, gas?
Shipping delivers your purchase to your front door. You don’t have to get dressed, get the kids dressed, get the kids into the car, worry if it’s raining or not, drive to the store, find a paking space near the store, get the kids out and into the store, then deal with surly customers and sales people in the store to find out what you wanted has just sold out.
Seeing the value now?
It’s true that some online businesses pad their bottom line by charging more for shipping than it costs to ship the item. But your free shipping is not really free. Somebody has to pay for it and it’s probably built into the purchase price, so that somebody is probably you.
Jaclyn Wells on July 26th, 2009 1:55 pm
While i do agree with Rich that shipping right to your home saves you not just time but money as well as you don’t have to spend money on gas. However, I do see Angelas point of view. There are many online shops that advertise having the lowest prices around…which they do until you get to the check out and they nail you with their shipping charges, which makes me look at their original advertisement as a big fat lie, the product may be cheap, but they sure do make up the difference in shipping charges. Some of them seem to charge so much that it would either be cheaper or at least the same amount to just go to the store and get it there.
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