Consumers Factor Shipping Into Cost Comparisons
In a study conducted by ForSee Results, more than one-third of consumers said free shipping was the most influential factor in their decision where to shop online.
Patti Freeman Evans, a senior retail analyst at Jupiter Research, told The Wall Street Journal, “Retailers are still experimenting and learning what works in this environment and that’s why you’ll see a vast number of strategies. What’s different now is more retailers are using free shipping very aggressively.”
Retailers from Amazon.com to Sears have recognized the draw that free shipping has with consumers and many have developed their own nuanced programs with the intent of turning more web site visits into purchases.
Amazon and others offer free standard ground shipping on items after a price purchase point has been met.
Circuit City offers free shipping on purchases of $25 or more.
“It is a very competitive environment, and we are determined to be competitive in the marketplace with our various offers.” said Jim Babb, a spokesperson for the chain.
Circuit City’s main competitor, Best Buy, rotates the items it will ship for free on a weekly basis.
Sears doesn’t offer free shipping as a rule, but it will occasionally offer a rebate coupon for consumers equal to the shipping cost.
Larry Freed, chief executive of ForeSee Results, said Sears may be being penny wise and pound foolish in its approach. “They’re playing on the fact that not everyone’s going to mail it (rebate) back in. From a financial perspective, you can see it, but from a consumer standpoint, it starts to degrade customer satisfaction.”
The one major exception to the free shipping rule is Wal-Mart. The retailer maintains that free shipping results in higher product costs.
“We focus more on offering our customers the best value on all merchandise at Walmart.com rather than special offers or discounts,” said spokesperson Amy Colella.
While Wal-Mart has not offered free direct-to-consumer shipping, the chain has experimented with free shipping to stores where consumers can go to pickup the items they purchased.
Discussion Questions: How important is free shipping
in the overall purchasing decision process? Is it still possible for a retailer
to differentiate with a free shipping program or has the feature become something
that most consumers expect?
It Comes to Free Shipping, One Size Doesn’t Fit All Sites – The Wall Street
Journal (sub. required)