Why free shipping is essential for eCommerce growth

Free shipping as an eCommerce growth strategy

For eCommerce businesses, every click, cart and conversion counts. In a market where customer expectations are rising and competition is tough, offering free shipping can be a powerful lever for growth. 

While at first glance it can be hard to see how absorbing customers’ delivery costs can be good for business, it’s important to look at the bigger picture. Free shipping can create a seamless, trustworthy experience; one that encourages shoppers to come back again and again. Certainly in 2025, the cost of eCommerce loyalty is priceless. 

What are the benefits of free shipping?

Today, online shoppers are looking for convenience, value and speed. And when it comes to their deliveries, free shipping is their top priority, followed by fast delivery and easy returns.¹ 

You’re not just satisfying a customer need. For busy online retailers, free shipping can also simplify operations, reduce customer service queries and improve marketing performance - all while helping you build a stronger brand. Let’s explore how.

1. Reduce cart abandonment

Cart abandonment is one of the biggest pain points in eCommerce, and unexpected shipping costs are often the reason shoppers don’t follow through with a purchase. 

By offering free shipping, you remove a key barrier and increase your chances of converting browsers into buyers. For business owners, this also means fewer abandoned carts to follow up on and reduces the need for reactive discounting.

Tip: try communicating your free shipping policy early in the shopping journey to reduce drop-off rates at checkout. 

2. Increase average order value with free shipping thresholds 

An effective way to offer free shipping without hurting your margins is to set a minimum spend threshold, encouraging customers to add more to their cart to qualify.

It’s a strategy used by 30% of businesses - $51–$100 being the most common threshold set. And the numbers show Aussie shoppers will add extra items to their cart to qualify. One in four are willing to spend up to $10 more to get free shipping, and one in five will spend up to $20 more.¹

3. Stay competitive in a crowded market

With more Australians shopping online than ever before, standing out is essential. Free shipping can be a key differentiator and help you increase online sales – especially during key events like Black Friday and Cyber Monday. 

During AfterPay Day 2024, 190,000 more households shopped online compared to the previous year.² These shoppers are actively looking for value, and the free shipping factor could be what secures you a sale over competitors. 

Tip: if you’re new to free shipping, trial it during a key sales season when you need to stand out, monitoring its effect on cart abandonments and conversion rates. 

4. Build trust and loyalty

Yes, peak season performance matters to eCommerce retailers. But with value-driven shoppers always looking for the best deal, year-round loyalty is more important than ever. 

Ensuring a smooth, simple and transparent delivery experience every time can help encourage loyalty – and offering free shipping can contribute to that experience. 

For the majority of Australian businesses offering free shipping (93%) – the parcel is sent at standard speed.¹ But to really sweeten the deal and encourage shoppers return to your store time and time again, you could even consider upgrading them to free Express or Next Day delivery. 

5. Grow your subscriber base 

Still on loyalty, free delivery can be offered as a part of your loyalty or subscription program. 

It’s a win-win; shoppers get a tangible incentive to opt in, while you get new leads to nurture with future offers and updates, while growing your database. Over time, it’ll help build stronger customer relationships and drive repeat sales.

6. Simplify the purchase decision

When customers don’t have to calculate extra shipping fees, the path to purchase becomes clearer. The top friction point - across all generations when shopping online – is unexpected costs arising at checkout.¹  Which tells us a frictionless checkout experience is crucial.

Free shipping can reduce decision fatigue, with shoppers getting the total cost up front, meaning they’re more likely to proceed with confidence.

For small businesses, simplifying the checkout process also makes your life easier; reducing the need for complex pricing logic or additional customer support around shipping enquiries.

7. Improve marketing performance

What’s a simple, compelling, benefit-driven message that can be used to improve the benefit of your marketing campaigns? Free shipping. 

Including it in email campaigns (especially subject lines), social media ads and Google shopping listings can help promote click-through and drive more traffic to your store. 

How to offer free shipping 

First, you’ll need to determine your strategy – whether that’s increasing prices to offset the cover of shipping, introducing a threshold, offering sitewide free shipping during a promotional period or using it as an incentive for new subscribers, on particular SKUs or any other criteria. 

Did you know that MyPost Business users receive discounted domestic and international postage rates as they move up the five savings bands? If this is you, you may be able to offset some costs that way. 

How you implement free shipping will differ depending on the ecommerce platform you use. You may need to set up a rule that applies free shipping to all orders regardless of the value, or only applies once the threshold is met. If offering free shipping to certain customers or for certain periods only, you could provide a code for shoppers to use at checkout. 

Once you’ve configured the rules in the back end, they should automatically apply until you amend or switch them off.

Reward and retain shoppers with free shipping 

The benefits of free shipping shouldn’t be under-estimated. From increasing online conversions to reducing cart abandonments, building loyalty and improving marketing performance, it’s a powerful incentive for shoppers – and a smart, scalable strategy that can help your business grow.