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- How to increase profits with a unique checkout strategy
Today, I want to share an intriguing strategy many brands are using to increase profits during the checkout process.
Like it or not, every e-commerce brand competes with Amazon, and Amazon has made buyers believe that shipping should be fast and cheap.
Most brands can’t compete with the shipping times Amazon offers, but there are some that have applied similar tactics to reduce their shipping costs.
Today, we’re going to check out several brands that utilize unique strategies you can emulate, and we'll show how you can take advantage of these concepts to deploy similar shipping options on your own checkout.
At checkout, most websites offer shipping options that look like this:
The problem with such shipping options is that they create uncertainty in the customers’ minds:
“Give me a specific date!”
“Too many choices confuse me!”
“I don’t care about the carrier!”
However, some websites are following the Amazon approach for boosting conversions and cutting shipping costs:
Offer limited, but clear and concise shipping options
Include delivery dates and countdown of days to delivery in each option
Hide meaningless carrier names and services, thereby taking advantage of “least-cost shipping arbitrage” to slash your shipping costs (more on that later)
Here are the checkout options of EA Gear, VKTRY, and Zahraa. Notice the difference between the standard checkout options and what these brands are doing.
Each checkout shows clear, concise options, each with its expected delivery date and countdown of days to delivery, which reduces any doubts about shipping costs and time in the customers’ minds and the potential for abandoning checkout.
However, these brands are also increasing their profit margins with this layout by anchoring the “Quick Shipping (Most Popular)” option.
This is where the concept of shipping arbitrage comes into play:
Ensure that every shipping option is using the least-cost shipping method to get the package delivered by its delivery date
Use the “Quick Shipping” option to capitalize on consumer psychology with a small tweak to the delivery date:
The first shipping option dispatches the package a few days later than usual
As a result, that second ‘Quick Shipping’ option appears to deliver a few days earlier even though both shipping options have the same cost
20% to 30% of buyers will choose the Quick Shipping option, increasing your profit margins on shipping
By utilizing shipping arbitrage and implementing a clear and concise approach to your shipping options, you can not only boost your purchase rates, but also offset your costs of providing free shipping.
To see how shipping arbitrage can be implemented for your brand, a tool worth checking out is Decimal.
I’ll be back with more retention analysis and Meta ads breakdowns for you next week.
Talk soon,
Sharad
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