CASE STUDY: FREE DELIVERY

May 30, 2019

5 MINUTE READ

What effect will eliminating a retailer’s delivery fee have on their overall business?

Background:

In March 2019, Drizly ran a test that lowered a participating retailer’s $4.99 delivery fee to $0.00. This decrease provided them with the most competitive delivery fee+minumum combination despite some of the highest product prices.

This retailer overlaps with between 2-6 stores depending on the customer’s address. They are the only store in this area with free delivery.

Store Results:

Order count increased 83% MoM, 413% YoY in March with only 16 days of free delivery. April saw another increase of 73% MoM, 787% YoY and has continued to grow since.

Free Delivery also had a massive impact on add-to-cart rate and conversion for this store:

  • Add-to-cart increased 120% (75 days pre-change vs. 75 days post-change)
  • Conversion increased 186% (75 days pre-change vs. 75 days post-change)
  • Average conversion is 230% higher than the market average since March 15th

This retailer went from 5% of total order volume in their serviced zip codes to 15% (75 days pre-change vs. 75 days post-change).

Conclusion:

Dropping a retailer’s delivery fee from $4.99 to $0.00 increased their add-to-cart rate, conversion and orders, shifted market share to their store, and increased total order volume for the zip codes they deliver to.

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