Among retailers’ multiple problems is free shipping. Spoiled by some online stores, consumers will not hear of a paid delivery and even expect to be able to return unwanted items for free. A trend that is unlikely to disappear any time soon, free shipping eats into retailers’ bottom line.

Shipping free of charge is part of a festering conflict between online and offline world of retail. The number of customers shopping online has been growing steadily, with free delivery being one of the undeniable perks of purchasing goods on Internet. Retailers have found themselves at the crossroads: should they bear the considerable cost of free shipping or start charging for delivery, risking the loss of a market share to competitors?

Rewiring consumers’ brains

At this point in time, retailers may have to reconcile themselves to the fact that free shipping is no longer one of the options – it is a must. The trick is how to make up for the cost it generates. Retailers’ archenemy Amazon serves as a great example of how things can be turned around without consumers even noticing. The online giant advertises its Prime service as a way to get fast and free shipping. Funnily enough, many customers consider this service to be free, despite the fact that they have to pay a monthly membership fee to enjoy free delivery.

Amazon’s influence on the world of retail does not end there. A pioneer in such innovations like quick and efficient searches, smart recommendations based on prior browsing history and fast and free shipping, the king of online retail profoundly shaped consumers’ expectations.

AEIOU of retailing

One of the ways in which retailers could tackle the problem of free shipping would be to provide consumers with another system of options and incentives, e.g. a better price for an item provided the client is willing to wait longer for its delivery. But the best solution for retailers is to turn the shopping experience into something thrilling, enjoyable and fun. So far, they have been unbeatable at this game.

How to improve customer shopping experience? Concentrate on what really is important to shoppers. In other words, never forget the AEIOUs of retailing. A is for advice, which sales people excel at; E is for experiential value; I is for interaction with real human beings; O is for opportunities that are often missed online due to misinterpretations of past buying histories; and U is for understanding of what consumers are looking for and how their experience can be optimised.

Source: http://knowledge.wharton.upenn.edu