Do you still pay for shipping?
This weekend I had the option of hauling myself to Lowe’s (my closest hardware store open on Sundays), driving even farther to a Home Depot … or ordering online. The clincher in my decision was that Home Depot offers free shipping on more than 60,000 items, including the plumbing piece I needed, saving me gas money and time.
Sold.
This past holiday season, 40 to 45 percent of online retailers offered free shipping in an attempt to secure sales, up 10 percentage points from the previous year, according to Bloomberg News. And, in a 2010 Forrester survey, 44 percent of participants said they abandoned an online shopping cart because of high shipping costs — the top reason for not completing an online purchase.
Americans are voting with their dollars: They don’t want to pay shipping fees any longer.
And retailers are responding. You’re probably seeing other major retailers including Amazon and Target offer free shipping with a minimum purchase, usually from $25 to $100. Now L.L. Bean has opened the door for smaller retailers by joining veteran Zappos.com in offering free shipping on every product year-round.
Fiona Dias, executive VP of strategy and marketing for GSI Commerce, says the move by L.L. Bean is “revolutionary” and trumps what she calls the “free shipping sometimes” strategy. “For consumers that’s irritating, because you might have been price shopping on Monday, and now it’s Wednesday and the price has gone up.”
Because of Amazon’s success with both its $25 minimum for free shipping and Amazon Prime, a $79 membership for two-day shipping year-round, other companies are studying its business model and borrowing tactics, Dias says.
“What happens with customers is once they feel they’ve paid their membership dues, they want to shop more,” she says of shipping memberships. “From a retailer expectation, you’ve made shopping so easy, so frictionless that the consumer will end up buying more.”
Companies are crossing their fingers that extra purchases will make up for the hit they take on shipping. Indeed, a 2010 BizReport survey found 93 percent of respondents said free shipping offers would entice them to spend more money with online retailers.
“I would expect more and more companies to move to free shipping every day if they haven’t already,” Dias says. She also expects many retailers who offer a minimum fee to lower it until they’re in the $25 range for most items.
“If you look at 2010, Amazon grew 10 billion [dollars] in sales, from 25 billion to 35 billion, which is unbelievable growth. No other retailer grew that fast,” Dias says.
“The big-box retailers are going down that list and saying, ‘We need to do as many of these things as we can do to match up.’ If they don’t, they’re going to go out of business, and free shipping is one of the ways to compete.”
Do you wait until shipping is free on retail websites or buy enough to get shipping fees waived?
– By Lauren Davidson, Atlanta Bargain Hunter
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8 comments Add your comment
mystery poster
April 19th, 2011
10:31 am
Yes, I absolutely wait until shipping is free to order an item. In fact, just this week I was ordering a gift online. I had chosen a food basket for about $25, they wanted to add $8 shipping. That’s over 30% of the item’s cost! I went to Amazon and found a similar basket for about the same price, with no shipping charge.
Pet Peeve: companies who will NOT tell you the shipping charge until you are almost done checking out. Why make you go through all that if you’re just going to abandon when you see the charge?
I have always had free shipping with LLBean by using their Visa. I ordered a LOT of Christmas stuff from them because of it. High quality merchandise with no shipping fees. And, if something isn’t right, no return shipping charges either. And, on a side note, if you have to call LLBean, a HUMAN answers the phone. None of that “press 1 for this, press 2 for that” nonsense.
Anica
April 19th, 2011
1:43 pm
If you order online from kmart, depending on the item you can pick it up at your local kmart store and avoid shipping charges. I did so this week on some chairs which would have incurred a high oversized shipping charge and it was easy as pie. So when it comes to oversized items, if Kmart has it that is going to be one of my first choices. They also mentioned at the pick up window that you can do this with even everyday items, and they will pull them from shelves and have them at the window for you, kind of like a personal shopping service if you are pressed for time. No charge for that either. The service is called mygofer.com.
Me
April 19th, 2011
2:33 pm
There is no such thing as free. The cost of the shipping has to be recovered somehow, somewhere, whether it’s in raising prices or cutting jobs in the company office, or by cutting shareholder dividend.
Somebody pays.
Laurie
April 19th, 2011
3:36 pm
Not only can you get free shipping, but ordering from a company that does not have a location in your state means they most likely will not charge state sales tax (this does not disolve your liability to pay said sales tax). Another cost savings tip when ordering online is to google “coupon code” with the store name you are ordering from. It can shave another 10-20% off your entire order, or provide free shipping that would not have been available otherwise.
mystery poster
April 19th, 2011
8:40 pm
I understand that there’s no such thing as “free,” that you’re paying one way or the other.
I also think that what a company saves when you order online has got to offset the cost of packaging and shipping. There is no “shrinkage” (theft), fewer employees, fewer brick and mortar costs.
Quinno
April 19th, 2011
9:08 pm
Oh yes, this thing called “free shipping” is here to stay. Of course it isn’t free but that isn’t the point. Having been intimately invloved in this for several years now with the Leader in the ecommerce shipping business, FedEx SmartPost, I can tell you that the free shipping explosion is no longer a gimmick. The cost to ship an item has been reduced by using services like SmartPost and the margins for profits on an item has also been reduced. Hence, companies can offer “FREE” shipping and all it means is that they don’t make as much on an item but they get the sale. Something is better than nothing. With technology being what it is, and as Miss Lauren has pointed out, companies know when they lose the sale and it often is at “check out”. We’ve seen unbelieveable growth over the past 5 years (and UPS is finally getting into the business) and it is due to companies finally getting great residential rates that allow them to “build the cost of shipping” into a competitive price for an item. Embrace it folks, and with gas prices being what they are, utilize the internet to shop, you can even do it in your undies and no one cares!!!
war eagle 1981
April 20th, 2011
7:01 am
retailmenot.com- tons of free shipping codes for thousands of stores. I always check there first before finalizing a purchase. As previously mentioned, coupon codes can come in handy, even giving you 10-20% off of an item PLUS shipping savings. Me likey.
Amy Parker
April 21st, 2011
12:49 am
Here’s a blog about “free shipping”. Think about it – every single item has to have the cost of shipping it from the seller’s location to the farthest point. The post office isn’t free, and neither is UPS or FedEx. I have to make sure that I make money on every sale, and if I have to cover shipping on every item, you will be paying my inflated sales price that includes shipping on every item. If I charge you for shipping at the end, I can combine items into one box.
http://www.artfire.com/users/richknobsales/blog
Vendors should display some kind of message about shipping “up front”, but since we get charged by weight and/or volume to ship, sometimes it’s hard to tell until you finish your order.