It’s hard to believe the holiday season is almost here, but any experienced retail business is knee-deep in peak planning by now. There aren’t too many big changes that can be made at this stage, especially given this year’s supply chain complications. But there is one thing you can still do that will help improve your 2022 peak season: reevaluate your free shipping threshold.

Unless you’re a huge retailer, absorbing all your customers’ shipping costs is neither realistic nor advisable. That’s why implementing a free shipping threshold has become standard practice in e-commerce — it’s sustainable for most businesses and, when done right, mutually beneficial.

Free shipping thresholds are nothing new, so chances are, if this strategy works for your business, you have one set already. But even if nothing about your products has changed, this minimum must be reconsidered from time to time to accommodate all the variables that do change, including supply chains, carriers, and, of course, customers.

According to a new study from my company, Dotcom Distribution, among 1,150 consumers surveyed across the U.S., 67 percent reported adding more items to their online shopping carts to qualify for free shipping. Look at any recent study and you’ll find similar results. Setting a free shipping threshold isn’t a matter of gaining a competitive edge but rather keeping your business in the game.

Maybe your threshold has been $50, but should now be $75. Maybe customers are willing to pay for expedited shipping under certain circumstances. It’s all about knowing your customers, so if you’re not digging into the purchase and behavioral data you have access to — or working with a partner that can do the digging for you — you’re passing up on the answers to the test.

Market data is also useful. For example, Dotcom’s study revealed that consumers who purchase beauty products are the most likely to add more items to their carts to get free shipping, compared to other categories of shoppers. We also discovered that 20 percent of consumers are more likely to pay for faster shipping today than they were before the pandemic. There are many variables in constant motion; having visibility into what’s happening in your category and with your customers today is fuel for future success. 

Carriers roll out new features, services, and other changes constantly; likewise, any new or updated products and packaging also impact shipping costs. To that end, you should explore all carriers — major and regional — annually, at minimum, to make sure you are utilizing the best options or mix at your disposal.

If you already have a 3PL partner, you should be benefiting from their carrier relationships. If working with a 3PL provider is in your plans, be sure to bring this up during your selection process. Established 3PLs can leverage the combined shipments of their high-volume clients to drive deeper discounts with carriers, resulting in faster service and lower shipping costs.