• by Jack Loechner , Staff Writer @mp_research, May 13, 2015

Ecommerce accounted for 7.7% of total retail sales (excluding foodservice) in Q4 2014, according to MarketingSherpa, up 14.6% from the previous year; yet 92.3% of retail sales did not happen online. To help answer the question “… what factors can most help increase online sales?” the report, from Daniel Burstein, Director of Editorial Content, looks at discoveries from an analysis by Walker Sands of more than 1,459 U.S. consumers.

Responding, an overwhelming majority of consumers (83%) say that free shipping would make them more likely to shop online, up from 80% one year ago. Free shipping is even more important than fast shipping: one-day shipping dropped in importance from last year, and less than half of customers prioritize same-day shipping.

N.B.These were online consumers for the 2014 data, who had made at least one Web purchase in the past year. This doesn't mean, however, that 100% of their purchases are occurring online or from your store, notes the report.

As classic direct-response marketers know, free is one of the most powerful words in marketing and advertising. However, consumers in general have become more skeptical and realize that most offers aren't actually free, says the report

Shoppers understand exactly what free shipping means and don't feel tricked by the offer. That is:

• They obviously have to buy something (or there would be nothing to ship for free)
• There is likely some sort of minimum purchase required
• The shipping will (probably but not always) be relatively slow

The benefit to customers already understanding how this offer works: marketers can cut to the chase because they do not need to spend their marketing resources defining and selling the offer itself. Because of this clarity and popularity, free shipping can help ecommerce sites, opines the report:

• Compete with brick-and-mortar choices by lowering the cost of receiving the product below the brick-and-mortar cost (time it takes to visit the store, cost of gasoline or public transit, etc.)
• Gain business from price-sensitive shoppers (although, price comparison engines that show total cost can diminish this advantage)
• Entice customers to increase their order size by having a minimum required purchase for free shipping
• Perhaps paradoxically, even encourage visits to brick-and-mortar locations, as more retailers make site-to-store their free shipping option

Dave Parro, Senior Account Director and Retail Technology Practice Lead, Walker Sands, says "…customers are gravitating toward ecommerce websites that offer the easiest and most convenient experience… “

That expectation of ease and preference for companies that stand behind their products can be seen in the growth of free returns, which have risen to become the second-biggest element that would encourage consumers to shop online more.

While ecommerce sites use many tactics to reduce anxiety and communicate trustworthiness, free returns is a clear indication that the company is willing to take a financial hit unless the customer is pleased with the transaction.

Parro notes that "Reliability rules all.” … trust is earned through brand reputation and past experiences in purchasing from the company…Amazon has effectively established this insurability… and, the general public trusts the name… retain(ing) customers from past shoppers… seeing Amazon as a 'go-to' for their online buying needs…"

Begging the question: How can your ecommerce site compete with Amazon?

For more from MarketingSherpa, please visit here.