Online shoppers should be able to buy simple everyday accessories for mobile phones and computers without them costing too much or taking too long to arrive. Since the beginning in 2011, SkalHuset delivered more than 2 million orders to satisfied customers in Sweden, Finland, Norway and Denmark.
Earlier, SkalHuset successfully piloted a free shipping threshold in Sweden to encourage upsell and conversion among consumers. It was then time to reassess the delivery pricing strategy in the rest of the Nordic markets, none of which had a free shipping option to begin with.
In Norway, the average order value (AOV) was lower than expected, and shipping costs significantly impacted profits. The team at SkalHuset assumed that implementing a free shipping threshold for Norwegian orders was the next best step, but they needed to understand which threshold would yield optimal results.
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Enter checkout A/B testing, a data-driven, multi-variant method of studying consumer behavior and validating delivery assumptions before making any important business decisions.
To test a free shipping offer, SkalHuset chose one carrier product to experiment with as the team knew that any other option wouldn't be cost-efficient even with a higher AOV. The company tested three threshold variants:
A. Free shipping on all orders;
B. Free shipping over 400 NOK;
C. Free shipping over 500 NOK.
To run the test, SkalHuset used a combination of its current e-commerce platform capabilities, Google Analytics, and Ingrid Checkout A/B Testing feature.
Rather than introducing delivery pricing all the way at checkout, SkalHuset transformed it into a unique selling proposition (USP) and informed customers — as early as on the product page — about the cart value they needed to reach to get free shipping.
There’s no single e-commerce delivery strategy that fits any company in any consumer market.
For SkalHuset in Norway, free shipping for orders over 400 NOK was the best performing strategy, as the 500 NOK threshold cut the store’s conversion rate by almost 1%.
Even though the company lost about 20% of shipping revenue due to the free delivery option, the overall increase in AOV and conversion resulted in much better e-commerce margins.
“We’ve implemented free shipping for a cart value over 400 NOK in Norway as soon as the test finished. Ingrid Delivery Checkout experiments are easy and straightforward to set up without too big of a hassle. The platform has a good management system with a lot of customization, if needed, and it’s simple to navigate, even for less experienced software users.”
