eCommerce

How ShipScout Makes Free Shipping Profitable With A/B Testing

October 6, 2020
 by 
Thierry Diallo
 • 
3
 min to read

Offering free shipping is a great way to get customers to pull the trigger and boost sales.  91% of customers are ready to leave a store if it doesn’t offer free shipping.

While free shipping is great for your customer, however, it can also harm your total revenue. Your company will have to cover the shipping costs, which might make you lose money in the long run.

You need a strategy that’s going to help you accurately forecast whether it’s worth it to offer free shipping on a particular item. Thankfully, there’s a new tool coming soon called Help Scout that does A/B tests on shipping rates to help you make the right choice.

The Benefits of Offering Free Shipping

Top brands such as Target and Zappos offer free shipping as part of their eCommerce strategy, and for good reasons. Check out these numbers:

The statistics make the case on the power of free shipping. But there are times when offering free shipping may not be the right fit for your business.

It all goes down to calculating the profit margins of your store. Whether or not you can offer free shipping depends on various factors, such as the type of product you’re selling, your location, etc. There’s no point in setting up free shipping if it ends up hurting your profits.

How ShipScout Works

ShipScout takes out the guesswork in determining if free shipping is a viable option. You’ll be able to A/B test how various shipping options affect your sales. Here’s an example of what it’s going to look like from the admin:

ShipScout Admin

In this screenshot, the user is testing three different shipping rates for their product:

  • Variant A got free shipping
  • Variant B got $4.95 shipping
  • Variant C got $7.95 shipping

Here we can see that offering free shipping is the right choice. It generates around $2.96 in revenue per visitor (RPV) with a 3.70% conversion rate, compared to $2.58 RPV when we’re offering $4.95 shipping, and $2.51 RPV when we’re offering $7.95 shipping.

The app will also come with an analytical dashboard to gain more details on each variant. You’ll access relevant data such as shipping costs, average order value, and conversion rates:


ShipScout Results by Variant

Conclusion

ShipScout is currently available as a beta version for Shopify stores. Merchants can expect the software to be available on the Shopify apps store later this summer.

Its variety of apps is one of the reasons to migrate your store to Shopify. Whether your goal is to boost your sales, improve customer reviews, or sell products on social media, the platform likely has an app for you. Schedule a free consultation today to learn how we can help you make the switch.


Thierry Diallo
Thierry is a freelance writer who's obsessed with eComm and digital marketing. He likes to play piano and binge watch Robert De Niro movies.
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