As the holiday shopping season gets going full blast, ecommerce businesses will rely on one of two tried-and-true tools to attract shoppers: free shipping and price discounts. But which of these deals work better?
The answer is a resounding: “It depends.” Depends, that is, on what demographic you’re marketing to. A couple of recent studies reported by eMarketer shed some light on whether free shipping or discounts work best.
Overall, percentage discounts are the most effective incentive to get customers to buy. Free or discounted shipping trails slightly behind.
However, another study that delved deeper into demographics found preferences for different offers vary based on age groups. Customers age 46 and up say free shipping is their biggest motivator; more than two-thirds say free shipping will get them to buy. What’s more, they get actively annoyed by sites that don’t offer free shipping.
In contrast, consumers aged 18 to 45 would rather get a discount than get free shipping. Those aged 25 to 34 were especially motivated by percentage-off deals while very few of them care about free shipping.
(In a very unscientific poll here at Zibster we seem to confirm these findings though there are only 2 people over 45 that were asked.)
What do these numbers mean to your marketing? You’re likely to get better results by personalizing your offers. If you are able to segment your customer email lists by age, for example, try offering free shipping to the older age group and discounts on price to the younger crowd.
Be sure to try different offers, such as different amounts for free shipping, different percentages off and different dollars off, and to measure the results of each offer so you can tweak your emails accordingly.