How to survive and thrive in the era of free shipping
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How to survive and thrive in the era of free shipping

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Today's online customers expect free shipping — but aside from lower margins, how does this affect retailers? GoECart CEO Manish Chowdhary has been locked in for a must see session at the Summit and ...

Today's online customers expect free shipping — but aside from lower margins, how does this affect retailers? GoECart CEO Manish Chowdhary has been locked in for a must see session at the Summit and is set to educate attendees on how their companies can actually thrive while still providing exceptional customer service, competitive shipping rates and fast delivery.

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How to survive and thrive in the era of free shipping How to survive and thrive in the era of free shipping Presentation Transcript

  • © 2013 GoECart Proprietary and Confidential. All Rights Reserved.How to Survive and Thrive in the Era ofFree ShippingOperations Summit 2013Thurs, April 25, 2013
  • © 2013 GoECart Proprietary and Confidential. All Rights Reserved.About Me and GoECart Founded in Feb 2000 Hundreds of Clients ranging from small- and medium- sizedbusinesses to Fortune 500 companies Committed to Product Innovation and Client Success(3 patents awarded, 3 pending) 2013 SIIA CODiE Finalist for “Best Commerce Solution” Featured as a LeadingVendor in Forrester Research 2012 Guide(SelectingYour Commerce SolutionAcross NorthAmericaAnd EMEA) 2012 CQIA Gold Innovation PrizeWinner 2013 StevieAwards GoldWinner for Best Customer ServiceThought Leadership Recognized By Industry Experts:
  • © 2013 GoECart Proprietary and Confidential. All Rights Reserved.US Online Retail Forecast
  • © 2013 GoECart Proprietary and Confidential. All Rights Reserved.Ecommerce Forecast Highlights $202 Billion in 2011 $226 Billion in 2012 $327 Billion in 2016 10.1%+ CAGR from 2011 - 2016 167 million people (53% of US population) purchasedsomething online in 2011 192 million people (56% of US population)WILL purchasesomething online in 2016 $1,207 average yearly online spending in 2011 $1,738 average yearly online spending in 2016.
  • © 2013 GoECart Proprietary and Confidential. All Rights Reserved.Customers are connecting with brandsand retailers differently More than 50% of mobile phones are now smartphones Tablet ownership reached 19% of adult population 68% of online adults have a facebook account; including over50% of adults over age 68 56% of social networkers have liked, followed or became fanof a brand, product or company
  • © 2013 GoECart Proprietary and Confidential. All Rights Reserved.Who are Shopping Cart Abandoners?
  • © 2013 GoECart Proprietary and Confidential. All Rights Reserved.Why are they abandoning?
  • © 2013 GoECart Proprietary and Confidential. All Rights Reserved.Top Reasons for Shopping Cart Abandonment
  • © 2013 GoECart Proprietary and Confidential. All Rights Reserved.Delivery Time and Abandoned Carts
  • © 2013 GoECart Proprietary and Confidential. All Rights Reserved.Options Online Shoppers Want to See
  • © 2013 GoECart Proprietary and Confidential. All Rights Reserved.Free shipping program stats and trends 23% said high shipping costs discouraged them from making a purchase 43% abandon their shopping carts when they find high shipping chargesat checkout 60% said free shipping was a “very important” factor 75% prefer to shop with merchants offering free shipping 90% said free shipping offers entice them to spend more 50% indicated free shipping offers made it more likely they would shoponline 72% would switch merchants for free shipping
  • © 2013 GoECart Proprietary and Confidential. All Rights Reserved.8 types of free shipping offers1. Total Free Shipping2. Free ShippingWith Membership3. Minimum Order Shipping4. Select Item Shipping5. Site to Store Shipping6. Free Return Shipping7. Flat Rate Shipping8. Free Shipping by Delivery Location
  • © 2013 GoECart Proprietary and Confidential. All Rights Reserved.Pros of Free Shipping1. Increased sales2. Increased traffic3. Move more inventory quickly4. A competitive edge over those not offering free shipping5. Gained prominence in search engines for the term "freeshipping" plus whatever item you are selling6. Higher seller feedback score and higher star ratings7. Less abandoned shopping carts8. Can help build referrals through word of mouth and socialmedia praise
  • © 2013 GoECart Proprietary and Confidential. All Rights Reserved.Cons of Free Shipping1. Product prices will be higher2. Lower profit margin3. Possible decrease in traffic from higher prices4. Advertising costs and time to promote the free shipping sales5. Customers come to expect free shipping6. Added expense for the retailer and might cause a reduction ofother services7. Discourages In-Store impulse buys8. Shoppers might not enter the checkout stage to see whatshipping and final costs would be
  • © 2013 GoECart Proprietary and Confidential. All Rights Reserved.Ways to combat the free shipping dilemma1. Include Shipping Charges in the Price of the Product2. Free ShippingThreshold3. Free Shipping Membership (e.g. ShopRunner,Amazon Prime)4. Ship a Subset of Items for Free5. Flat Rate Shipping (e.g. $4.99 per order)6. Other Optionsa. Explore all potential carriers and services including hybrid shipping (e.g. FedExSmartPost, InXpress, UPS Mail Innovations)b. Ad supported shipping (e.g.AdShip)c. Vendor discounted shippingd. Pick up from storee. Drop shipf. Free upgradesg. Audit your carrier bills or outsource ith. Eliminate double shipping
  • © 2013 GoECart Proprietary and Confidential. All Rights Reserved.Ways to combat the free shipping dilemma7. Rate Shop8. UseAir Delivery Only if Necessary9. Monitor DIM, Oversize Charges10. Use Rewards Cards for Payments11. Process Electronically12. For Freight Shipments, Use a Broker13. Seek Group Discounts14. Request Discounts on Supplies15. Watch for Billing Errors16. Consider Outsourcing
  • © 2013 GoECart Proprietary and Confidential. All Rights Reserved.Death of Free Shipping?
  • © 2013 GoECart Proprietary and Confidential. All Rights Reserved.Welcome to GoECart360The Ultimate All-in-One Multi-Channel Ecommerce Suite
  • © 2013 GoECart Proprietary and Confidential. All Rights Reserved.Ray Miller Founded MyWedding Reception Ideas.com in 2003 GoECart Merchant since 2003 E-commerce business built on supplier drop shipbusiness model 15 Suppliers across the U.S. and Canada
  • © 2013 GoECart Proprietary and Confidential. All Rights Reserved.Competing In a Free Shipping Market1. Increase product markup to offset shipping cost2. Offer free shipping on order values over $100.00 (dollaramount example) – No increase in product markup3. Free shipping with no additional product markup
  • © 2013 GoECart Proprietary and Confidential. All Rights Reserved.Free Shipping Promotion Challenges1. Increasing shipping rates2. Lower profit margin3. No control over shipping costs with drop ship businessmodela. Suppliers charging published ship ratesb. Supplier drop ship fees4. Multiple item orders shipping from multiple warehouses
  • © 2013 GoECart Proprietary and Confidential. All Rights Reserved.Our Solutions to the Free Shipping DilemmaFocus on converting sales without free shipping promotions• Competitive product prices every day – no promotions• Publish and charge real-time shipping costs• Use of UniqueValue Propositions to sell our strengths• Customer testimonials• Easy web site navigation• Easy ordering process• Great Customer service before, during and after the sale
  • © 2013 GoECart Proprietary and Confidential. All Rights Reserved.Thank You!Manish ChowdharyFounder & CEO, GoECartToll-Free: 877-243-3612Email: sales@GoECart.comTwitter: @goecartwww.GoECart.com