More multichannel retailers used free shipping promotions in the first quarter of this year compared to Q1 of 2008—up from 47% to 55%, according to a new survey from e-mail marketing vendor Experian CheetahMail.

With free shipping offered as an incentive more often, retailers should carefully plan such promotions and be selective about when they offer the deal and who they offer it to, says the study, “Free Shipping report: Benchmark data and analysis for email marketers,” which is slated for release next week.

It found 70% of respondents across all industries—online companies offering business and consumer products and services, catalogers, and multichannel retailers—had higher conversion rates on e-mails offering free shipping than on other types of marketing e-mails. Of the 70% with higher conversions, 78% saw increased transaction-to-click-rates—defined as the total number of transactions divided by the number of unique visitors clicking on the e-mail—and 47% had higher average order values in free shipping e-mails compared to other marketing e-mails.

The success of free shipping e-mail promotions varied by industry, with the consumer products and services industry experiencing the largest gains. Transaction-to-click rates for free shipping e-mails in this segment were 60.7% greater on average compared to other marketing e-mail messages.

To create the most profitable and successful free-shipping e-mail campaign, Experian suggests the following:

• Feature the right products. Free shipping on overstocked items tends to perform poorly. Marketers should pair free shipping offers with products consumers are interested in, Experian’s report notes.
• Limit free shipping offers. Constantly running free shipping offers may dilute their effectiveness, Experian says. Offering free shipping for a shorter period is typically more successful than offering it over a longer period.
• Segment the e-mails. Divide the subscriber list into groups of customers based on their product interests, then offer those groups the products with free shipping.

“The release of the free shipping report data and analysis is extremely timely given the upcoming holiday season. Considering that companies will be fighting extra hard for dollars this year, and taking account of the fact that we have seen holiday e-mail volume increase at least 20% or more year over year for businesses in all industries, e-mails should be optimized to maintain subscriber engagement,” says Sara Ezrin, senior strategy consultant, strategic services, Experian CheetahMail.

Source: Internet Retailer

PS. Don’t forget to register for the webinar “Getting the most out of your holiday email campaign” with Andrew Kordek and Tamara Gielen on October 6th.