Back to flat-rate postal costs?

Customers have high expectations of online shops: inexpensive prices, the fastest possible delivery – and free shipping. And if they don’t like something, they also want to be able to return it free of charge. For the retailer, these are huge challenges. What could a solution look like?

Surveys regularly show that a large proportion of online shop customers expect free delivery and free returns. The preference for free deliveries might come from experiences when ordering from abroad. Postage, customs clearance and VAT costs in Switzerland might indeed rapidly come to an amount that is out of proportion with the price of the product. In that case, it makes sense not to pay anything for delivery.

Retailers’ fear of the consequences if they clearly state shipping costs is probably unfounded. Most customers probably know that in business, nothing is “free”. If the retailer does not charge for shipping, the logistics costs need to be included in the selling price.

Punishing good customers

Only if the logistics costs are hidden in the selling price can the feeling of “free” be offered to customers. But this also means that good customers with large shopping baskets and few returns are punished. That’s because they pay more than would strictly be necessary, only because other, not such good customers often place small orders and return items. These are costs that have to be recovered. Is this a principle of solidarity in a market economy?

Can flat-rate postal costs be shown in a positive light?

We’ve often talked about how, from a marketing perspective, “free delivery” can be a potential tool. But it’s an expensive one. So why not reintroduce the good old flat-rate postal cost system?

It just needs to be explained positively, such as by noting that it’s a way to reward good customers.

Doing so creates advantages for the retailer:

• Lower product prices (which have a positive effect on results on pricing search engines)
• A tendency towards higher revenue for each order
• Fewer “just for fun orders”, with fewer returns (and lower return costs)

The important thing is to communicate the strategy clearly and unambiguously, so that customers are not surprised by apparent extra costs. It’s an option that can pay off.