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Could Free Shipping Boost Your Holiday Sales?

Compete Blog November 29, 2012 Comments Off

Shipping image

Image from: Shipping / Thinkstock

According to the Compete Fall 2012 Online Shopper Intelligence Survey™, 62% of consumers said they would not have made their most recent purchase if they had not received free shipping.  Clearly, free shipping is a must have for consumers.  Competitive sites, The North Face and Patagonia both offer free shipping on their orders over a certain amount. While The North Face offers free shipping on orders more than $99, Patagonia has a lower free shipping rate at $75. Does the $24 higher free shipping threshold impact North Face traffic?

Looking at Compete.com we can see that while traffic between the two sites is typically close throughout the year. The North Face is able to consistently win market share to their site throughout the peak holiday season. Throughout the year traffic is close, which is surprising because Patagonia has a lower free shipping rate yearly, while the North Face offers free shipping for all orders during the holidays.

unique visitors to patagonia.com and thenorthface.com

Looking further, we can also see that the North Face receives significantly more search referrals than Patagonia since they have a bigger Unique Visitor base. What is interesting to note is that while The North Face has a higher volume of search referrals, search share is similar for both sites.

Total Search Referrals to Patagonia.com and TheNorthFace.com

Share of Traffic by Search Referrals

The real question though, is whether or not any of this traffic or search is driving conversion on the two sites. Looking at conversion rate on both sites throughout the last year we can see that Patagonia does have a higher conversion rate overall.Conversion Rates of TheNorthFace.com and Patagonia.com

While Patagonia does offer a lower free shipping rate than The North Face, and consumers for Patagonia have a higher conversion rate, what does that mean for The North Face? Patagonia typical wins the conversion race, but The North Face sees higher conversion as we head into the holiday season. It seems that free shipping is the best way for retailers to drive conversion.

Moving forward, the questions to ask are:

  1. Is The North Face seeing enough of an increase in holiday conversion to justify only offering free shipping seasonally?
  2. Should retailers offer free shipping seasonally or all-year round?
  3. Do consumers spend more with free shipping?

 

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