Shipping Options Are the Name of the Game for Online Shoppers and Merchants
If we can agree that Nike has done a decent job with checkout optimization, then we can agree on the lessons to be learned from what it has done with checkout. But there's more to the story than just sleek designs and fancy shoes. It's all about the power of choice!
A couple of mind-boggling stats about Nike:
- In the past nine years, Nike has grown its e-commerce sales by nearly 12X.
- As of the company’s FY23 earnings at the end of June, e-commerce now accounts for a whopping 26 percent of Nike's overall sales — up from just 10 percent in FY19
So, how did Nike (just) do it?
An incredible brand, great products and good digital interface? Yes, all parts of the equation. But almost anywhere, a Nike customer could leave their house, travel 15 minutes, and buy Nike products in a store. There has to be more to its e-commerce growth specifically. One major factor: giving its customers the freedom to choose their shipping options at checkout.
“Hold on a second,” you might be saying, "what's the big deal about shipping options?”
Let me break it down for you. Picture this: you're browsing through an online store trying to find the perfect pair of Retro Jordan III’s. You finally stumble upon the ones that make your heart skip a beat. You click "Add to Cart," and go to check out …
And staring back at you are the shipping options. Standard. Expedited. Express. There’s a wave of possibility. You have the power to choose how fast you want those shoes on your doorstep and what you’re willing to pay to get them faster — or how long you’re willing to wait to save some money. It's like being in control of your own destiny, except with shoes.
So, what does that mean for sellers concerned about their shipping? The mainstream narrative for e-commerce shipping has been dominated by two words: "free" and "fast." Everyone wants their packages delivered yesterday, and they want it at no cost. But here's the harsh truth: there's no such thing as free, and fast(er) shipping comes at a cost.
That's where optionality comes into play. By offering different shipping options, brands can cater to a diverse range of customer needs and preferences while also ensuring that the various delivery levels on the table make sense for their business. Some customers might be willing to wait a bit longer if it means saving a few bucks. Others might be in a hurry and willing to pay a premium for lightning-fast delivery. Both may not be simultaneously possible, but that optionality gives consumers the freedom to choose what matters most to them.
Consider this fascinating analysis from Fulfillment IQ, which works with many high-growth brands. Its research found that for a very fast-growing brand, as long as the product was delivered within eight days of purchase, there was no negative effect on customer lifetime value (CLTV). Surprising on the surface, but it shows that consumers are willing to cut young, up-and-coming brands some slack. For this particular brand, that means customers weren't just willing, but were happy to wait over a week for their deliveries if it meant they got free shipping. There was no bitter taste of compromise in consumers' eyes — they were making a fair trade.
It works the same on the delivery cost side. Imagine you're browsing an online store and you find a product you've been eyeing for weeks. Your excitement is through the roof and you're ready to make the purchase of a lifetime. Then you see it: shipping prices. High shipping costs can be a deal-breaker for many customers, sending them running to competitors faster than you can say "shipping fees."
By offering different price points for shipping, brands can eliminate this roadblock and keep their customers smiling from ear to ear.
It’s all about creating a seamless and enjoyable customer experience, and giving consumers the option to choose various shipping levels to fit their budget is a surefire way to achieve just that.
But let's not forget the cherry on top: repeat purchases. When customers have a positive shopping experience, they're more likely to come back for more. In e-commerce, shopping experience and shipping experience are almost one in the same. By providing them with shipping options that align with their preferences, you're building trust and loyalty. And trust me, loyal customers are worth their weight in gold (or maybe shoes, in Nike's case).
So the next time you're shopping online, pay attention to those shipping options and really think about how you feel when you see one flat rate option vs. three or four at different speeds and price points. It will change the way you think about the company that you’re shopping with — and it already was doing so, even if subconsciously.
These options are more than mere checkboxes on a screen: in them lies the power to convert more sales and create delightful customer experiences. Embrace the beauty of optionality and remember, it's not just about the shoes; it's about the freedom to choose how they find their way to your doorstep.
Nima Elyassi-Rad is a technology executive, investor and founder. He currently serves as vice president of global business development and sales at Shippo, a multicarrier shipping software provider for e-commerce businesses.
Nima is a technology executive, investor and founder. He currently serves as VP of Global Business Development and Sales at Shippo. Previously, he founded a soccer brand, spent time as a VC, knows how to sling pizza and group coupons, and put in time as a hip-hop radio DJ.