Cyber Week 2019: Shipping clubs are the new normal

by Scott Spivack • ,

Every retailer knows it’s more difficult to acquire a new customer than to retain an existing one. With the rising popularity of shipping programs that offer free or expedited shipping in exchange for an annual or monthly fee, that trend is likely to continue.

Membership in shipping programs has skyrocketed, increasing 25% since 2015, or between 5-8% annually.

Are you a member of a shipping club or program (i.e. Amazon Prime or ShopRunner)?

Source: Bizrate Insights Flash Survey, December 2019.

While Amazon Prime is by far the largest of these programs, it’s not solely responsible for this growth. New Prime enrollments stagnated during last year’s holiday season, and despite a slight rebound earlier this year, it’s clear that their program is running out of room to grow.

This creates an opportunity for smaller retailers and third-party shipping clubs to promote their own services to consumers and win their loyalty.

We recently covered the importance of retail loyalty programs on our blog, digging into what makes them appealing to shoppers and the impact they have on overall customer loyalty. When we asked which perks mattered most to them, survey respondents overwhelmingly chose free shipping.

That makes it no surprise that consumers are more likely to shop frequently with a brand if they belong to a program that offers them free or discounted shipping. Nearly two-thirds of shoppers – 64% – responded that they’re more likely to purchase more from a brand if they belong to their shipping club.

How does your membership in a shipping club or program affect your shopping frequency?

Source: Bizrate Insights Flash Survey, December 2019.

Holiday shoppers may be less loyal overall than year-round shoppers, as a similar survey in October found that 73% of respondents are more likely to repurchase from a store if they belong to its loyalty program. However, regardless of the time of year, a free shipping program with paid membership can be an effective way to attract more customers while offsetting logistics costs.

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