Shipping Fees Transparency on Lazada Indonesia

Overview

Lazada Indonesia offers two shipping options (‘standard’, ‘GoJek’) depending on location of items and customers. Customer shipping fees for the ‘standard’ option will vary depending on multiple factors:

  • (Assumed) package weight(s)
  • Value of seller basket
  • Seller location
  • Customer location

Currently customers receive very little guidance throughout the purchase process on what shipping options (lead time, fees) apply to their cart selection (some info on PDP, then again during checkout).

Besides, Lazada is taking care of most of the shipping fees (free shipping) even when customers purchase a small order (below RP 50.000). This costs a lots for Lazada and the company wants to charge shipping fees for order below RP 50.000. This project aims to provide a better explanation on new shipping fees rules and prevent abandon cart on checkout.


Objectives

Decrease ‘cart abandonment’ by reducing surprises on shipping fees

Enable more “intricate” shipping fee configurations by improving communication to customer. This in turn

  • Can decreases shipping fee subsidies as they can be given out in more targeted manner
  • Can increase low-value assortment in ventures who build shipping fee structures supporting sales of low-value items
  • Encourage customer to purchase more

Analysis

Current Problems

Understanding:

  • Shipping fee value always based on current item only (not factoring in items already in cart)
  • Customer location determines: value threshold for free shipping
  • At Checkout and Cart, Shipping fee is calculated base on order value
  • If there is 2 delivery options, free shipping policy only applies to Standard Delivery method

User Research

Personas (simplified)


Jethro: Repeat customer from Kalimantan (Kalimantan Timur, Kota Samarinda) — far away from Jakarta

  • Logged in
  • Compare products and looking to score lowest price + shipping fees
  • Familiar with Lazada Shipping Fees
Lazada objective: help Customer finding the right SKU with certainty, no drop-off during checkout (lower cart-drop-off-rate)

Eleazar: First time customer from Surabaya, looking to get diapers urgently

  • Guest user
  • Not brand-loyal — just needs diapers, mid-range price
  • Willing to pay more for Express Delivery (next day), pays by credit card
  • Might need additional baby products (wipes, baby bottle) although no urgent purchasing intent
Lazada main objective: direct user to diaper assortment available with Express Delivery (higher add-to-cart)
Lazada secondary objective: build bigger basket around initial item (higher AOV)

Suwandi: Casual browser from Jabodetabek (West Java/Java Barat, Kabupaten Bogor)

  • Doesn’t log in
  • Browse for low price products RP 50.000 — 100.000
  • Only accepts COD as payment method
Lazada objective: encourage to increase basket value to >RP30,000 (higher AOV)

Approach

Customer location is very important for setting free shipping fee threshold. Lazada needs to get customer location as soon as possible to provide a better experience throughout the purchase flows.

Get User Location in the Purchase Flow


Case 1: Jethro

Design:

Provide Customer about Free Shipping Fee threshold on Product Details Screen:


Case 2: Eleazar

The same approach to get user location and provide the right SKUs, but also have a smart filter methods to let user quickly looking for products with faster delivery:


Case 3: Suwandi

Display Free Shipping Fee threshold on PDP

Encourage Customer to add more product after adding to cart:

On Cart: