Did you know that the average cart abandonment rate is an astounding 70.19%? And according to a 2023 Baymard Institute study, the overwhelming reason for abandoned carts is extra costs—most importantly, shipping fees.
Big businesses have their own long-standing relationships with carriers and 3PLs so when carrier options shift and rates change, they're taken care of. However, for small to medium sized businesses, this isn't the case. Smaller business owners need to look out for themselves to ensure that their operations aren't jeopardized.
The last thing a growing business needs is unreliable shipping and a poor customer experience. A customer's journey is THE biggest determinant of whether your business will be suggested to a friend or labeled a bad apple. Large corporations have the resources and refinement in their practices to be able to deliver items quickly, with real-time notifications, and flexible shipping options such as same-day delivery, next-day delivery, and 2-4 day delivery depending on the customer's preference. These elements have transitioned from being luxury experiences for the customer to the new standard which has created new obstacles for budding businesses as more and more brands offer this and more.
You can have an excellent product, be an upstanding brand, and have above-average customer service but, if your shipping options are not satisfactory to the customer, they will abandon their cart more likely than you think.
Low-value orders paired with modest shipping fees that exceed product prices often lead to hesitation or abandonment as customers seek more affordable options. High free shipping thresholds can also contribute to abandonment due to the perceived spending burden.
Beyond cost, cart abandonment involves delivery and fulfillment, where efficient handling is crucial. Inefficient shipping management can cause customers to abandon their carts.
Transparency in shipping expenses and clear communication for your customers is essential to gaining a loyal brand following. This is why staying up to date with current shipping rates and policies is important so you can prepare your business for anything.
Another way to keep up with customers' shipping expectations is providing multiple shipping options to cater to diverse customer preferences. Give customers the flexibility to choose from a range of delivery services, such as standard shipping, expedited shipping, same-day delivery, or local pickup. Providing multiple options meets shopper preferences and creates an open, adaptable buying journey, which increases purchase completion and minimizes abandoned carts.
Do you charge handling fees for online purchases? Be upfront about these costs from the start. Hidden fees frustrate shoppers and often lead to abandoned carts. When customers discover unexpected charges, they may question your business integrity.
Remember that handling fees differ from shipping costs. They cover your team's time spent selecting and packaging items, special materials for fragile products, and other operational expenses. Extra handling may apply for pre-delivery assembly, gift wrapping services, or product customization.
Display the handling fee separately from shipping on the cart page with a clear cost breakdown. When customers see exactly what they're paying for upfront, they're more likely to complete their purchase. This honesty builds customer confidence and reduces checkout abandonment rates.
Free shipping stands out as a powerful tactic to reduce abandoned carts, especially for businesses with high-ticket items or strong average order values. By covering delivery costs, you remove a common purchase barrier and demonstrate customer focus. This approach not only helps nudge a potential customer towards completing their purchase, but also encourages future purchases.
According to SaveMyCent, this strategy works best when product margins can absorb shipping expenses. The investment typically pays off through increased customer satisfaction and higher overall sales volume.
Beyond the immediate financial benefits, free shipping builds lasting customer relationships. It attracts new shoppers, improves conversion rates, and enhances brand perception, giving you an edge over competitors who charge for delivery.
Several effective approaches to offering free shipping include:
Providing it as an exclusive benefit for members, subscribers, or loyal customers to encourage repeat business
Setting achievable minimum purchase thresholds that motivate larger orders
Including free shipping offers in cart abandonment email sequences to recover lost sales
To maintain profitability while offering free shipping, consider building shipping costs into product prices, negotiating better rates with carriers, or establishing minimum order requirements. Limited-time shipping promotions can create urgency while balancing customer satisfaction with business needs.
Consider creating a loyalty program where shoppers earn points toward shipping-free orders, creating mutual benefits. Amazon Prime's remarkable success demonstrates how effective this strategy can be.
To implement this approach, develop a membership program, exclusive club, or engaging newsletter. Then make free shipping available as a special perk for these subscribers. This valuable benefit reduces checkout abandonment while simultaneously expanding your email list and marketing pipeline by drawing in new customers.
Free shipping thresholds set the minimum purchase required for customers to receive complimentary delivery. Setting this amount correctly is vital for reducing cart abandonment, attracting buyers, and maintaining competitive advantage. If you notice high abandonment rates, your threshold may be too steep and deterring purchases.
While offering universal free shipping isn't feasible for most businesses—particularly those selling numerous low-cost items where shipping expenses could exceed order value—implementing a strategic threshold is necessary. Without this incentive, customers rarely increase their order size.
Try lowering your threshold to an achievable level for most shoppers, which can boost your Average Order Value (AOV). A good starting point is setting the threshold slightly above your current AOV. Make sure to prominently display this offer throughout your site to encourage larger purchases.
Abandoned cart email sequences involve sending follow-up messages to shoppers who left items unpurchased, encouraging them to return and complete their order. This strategy delivers impressive results—Moosend reports that these emails achieve a 45% open rate, with half of opened emails receiving clicks, and half of those clicks converting to completed sales. Sweetening these reminders with free shipping offers or discount codes can substantially enhance your recovery effectiveness.
Implementing these strategic shipping solutions isn't just about reducing cart abandonment—it's about transforming your entire customer experience. By offering transparent pricing, flexible options, and targeted incentives like free shipping, you position your small business to compete with industry giants while building lasting customer relationships.
Remember that each abandoned cart represents not just a lost sale, but valuable feedback about your shipping process. Take action today by:
Auditing your current shipping costs and presentation on your website
Testing different free shipping thresholds to find your optimal price point
Creating an automated abandoned cart email sequence with compelling offers
With the right shipping tactics in place, you'll not only recover abandoned carts but create the seamless shopping experience that turns first-time buyers into loyal advocates for your brand.