FedEx recently released a new white paper in partnership with Morning Consult, titled Bridging the e-Commerce Divide: Meeting Consumer Demands with Merchant Offerings. The report highlights a crucial trend in online shopping: consumers now prioritize free shipping over fast delivery, a preference that significantly influences cart conversion rates and average order value.
The survey findings indicate that 75% of consumers prioritize free shipping over faster shipping options, with over half of respondents (57%) choosing free shipping as a top factor in their purchase decisions, surpassing even price considerations (54%). Additionally, 81% of shoppers are willing to increase their spending to meet minimum order requirements for free shipping, emphasizing the growing importance of free shipping in consumer purchasing behavior.
Despite the demand, only 48% of retailers currently offer free shipping, presenting a missed opportunity for many merchants to enhance conversion rates and improve customer experience.
“The consumer preference for free shipping over fast delivery, and the willingness to build bigger baskets to hit the threshold, is a significant behavioral shift that has a sizable impact on cart conversion and average order value,” said Jason Brenner, Senior Vice President, Digital Portfolio at FedEx. “As the holiday season approaches, the question is not whether retailers can afford to offer free shipping—it’s whether they can afford not to.”
Consumer Willingness to Pay for Convenience
While free shipping is a priority, the report notes that many consumers are still willing to pay extra for added convenience. In the survey, 40% of consumers preferred next-day home delivery from local retailers, with other delivery options like in-store pickup (19%) and curbside options (18%) trailing behind. Additionally, 55% of consumers indicated they are willing to pay for same-day delivery, while 45% would pay for next-day delivery.
The report suggests that the best approach for merchants to drive higher cart conversions includes a combination of free shipping, free returns, accurate tracking, and on-time delivery. Retailers are encouraged to set attractive minimum thresholds for free shipping, promoting larger cart sizes and enhancing the customer experience without deterring potential purchases.
About the Survey
The white paper is based on two surveys conducted by Morning Consult. The consumer survey took place from May 23-28, 2024, with a sample of 2,103 U.S. consumers, carrying a margin of error of +/-2%. The merchants survey was conducted from May 31-June 11, 2024, among 510 U.S. merchants with over $100,000 in annual revenue who sell goods online, with a margin of error of +/-5%.
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