More retailers throw in free shipping to grab holiday shoppers
In the post-recession shopping world where impulse buying largely has fallen by the wayside, retailers are doing their best to remove any obstacle that could make consumers think twice before opening their wallets.
So it is little wonder that free-shipping deals are spreading this holiday season. With merchants in the biggest shopping months of the year, waiving shipping fees helps them capture a piece of holiday budgets.
Among online retailers, 85% planned to offer free shipping at some point this holiday season, up from 79% last year, according to the National Retail Federation.
And 36% of online merchants say their budget for free shipping is higher than last holiday season, the New York-based retail trade group said.
“Most merchants I talk to offer free shipping because it’s about keeping up with the competition and ensuring you don’t lose any sales during this very critical time,” said Sucharita Mulpuru, principal analyst at Forrester Research, a technology research firm in Cambridge, Mass.
Best Buy Co., among the latest to enter the free-shipping arena, is offering free online shipping through Dec. 21 on hundreds of thousands of items including CDs, Blu-ray and DVD movies, gaming software and accessories. The offer excludes laptop and netbook computers, video game hardware and Apple Inc. iPads and iPods.
Wal-Mart Stores Inc. is offering free shipping on its website with no minimum purchase on almost 60,000 items, including many toys and electronics. The offer, the first of its kind for the world’s largest retailer, is slated to run through Dec. 21.
Most merchants have lowered the minimum purchase price to qualify for free shipping to $25 to $40, down from last year’s $50 minimum. But few have no minimum purchase requirement.
“My belief is that we’re going to continue the evolution to free shipping for everything at some point,” said Kevin Strawbridge, president of online savings hub DealTaker.com, which tracks sales at 2,400 retailers nationwide.
Gap Inc. is one retailer that appears to agree. The specialty store chain disclosed in October that it plans to launch an everyday free-shipping option in 2011 across all its brands — Gap, Banana Republic, Old Navy and Athleta — for orders of at least $50. (Piperlime, Gap’s online shoe division, already offers free shipping on all purchases.)
“The recession has accelerated the consumer deal-making behavior, whether it’s discounts or coupons or free shipping,” said Andrew Lipsman, director of industry analysis at ComScore Inc., a Chicago-based digital market research firm. “As they learn the behavior, they’re less likely to move away from it, even as the economy rebounds. It becomes an expectation. It’s the cost of doing business.”
In each week of the November-December 2009 holiday season, 45% to 50% of e-commerce transactions included free shipping, according to ComScore. That outpaced the 2008 season, when the figure ranged from 34% to 49%.
Shoppers usually spent more on each order when merchants waived shipping fees, the ComScore survey showed.
Luke Knowles, founder of FreeShipping.org, is helping the movement by organizing a free shipping day Dec. 17. Participating merchants guarantee delivery by Christmas Eve. Knowles estimates the number of retailers taking part this year will top 1,000, up from 750 last year and 250 in 2008, the event’s first year.
But there will be plenty of other opportunities to avoid shipping fees, retail experts said.
L.L. Bean Inc., for example, is offering free shipping on orders until Dec. 20. Target Corp. is offering free shipping on more than 800,000 items through Dec. 11 on orders of at least $50. Target’s selection is up from more than 100,000 items last year. Lego’s online store has free shipping on orders of more than $99 until Dec. 14.
Meanwhile, national chains including Sears and Kmart are trumpeting programs that enable shoppers to avoid shipping fees by ordering online and picking up purchases at stores. Wal-Mart has introduced free shipping to FedEx offices in cities where it has few or no stores, including Los Angeles, Boston, New York, Washington and Chicago. Best Buy is letting shoppers pick up orders at its stores and warehouses, especially if they need it quickly.
