(In 11th paragraph, corrects the name of Monetate's chief
marketing officer to Kurt Heinemann)
By Beth Pinsker Gladstone
NEW YORK Dec 15What shoppers seem to want most
this holiday season is free shipping. But at what cost?
Before the end of 2012, about 90 percent of retailers say
they will offer free shipping, according to Shop.org, the
website of the National Retail Federation trade group. But that
kind of near-universal acceptance leaves a lot of room for
Not all free shipping offers are created equal, and not all
of these deals reduce the overall cost of your purchase.
Multiple studies that say consumers want free shipping.
According to Deloitte & Touche LLP's annual holiday
survey, 71 percent of consumers rank free shipping at the top of
their Christmas lists, although research shows cost often
matters more. Even so, many shoppers do not go out of their way
to find offers, or claim the ones that are right in front of
"Retail is detail, as they say," chimes Alison Kenney Paul,
vice chairman and U.S. retail and distribution leader with
Deloitte. "If you dive in, you'll find that it's free shipping
on certain items with certain modes of shipping or free on just
certain categories. You see that big yellow flashing neon sign,
and underneath you have to read the fine print."
This is especially true for events like Free Shipping Day,
on Dec. 17, when more than 1,500 merchants offer some kind of
free shipping. Scan the list (http;//freeshippingday.com), and
you see a range of offers from truly free shipping that is
always available at retailers like Zappos, to ones with high
required purchases to qualify, like J Crew's $175 minimum.
"Retailers are in business and shipping is not free to them,
so they have to balance what they offer with the cost and how
much it's going to increase their sales," says Dan Davis, editor
in chief of Internet Retailer magazine.
So what do you have to know to get the best deals and not
get duped? Pay attention to these key details:
1. Minimum purchase requirements
At Amazon.com Inc, the biggest online retailer, the
gold standard has long been $25 for Super Saver shipping, and a
$79 Prime membership gets you free shipping on thousands of
items. Zappos, with free return shipping, is another leader, as
is L.L. Bean, which offers year-round free shipping with no
minimum. But for the rest of merchants, minimum purchase
requirements can go up significantly.
"The caveats can lead to very dissatisfied consumers over
the long run," says Larry Freed, chief executive officer of
Foresee Research, an analytics company based in Ann Arbor,
Michigan. "The purchase requirements may cause them to throw an
item in a basket, but the long-range impact can be significant."
2. Shipping speed range
The free offers can take a week to arrive, which is why
companies push faster, more expensive options. This season,
Davis sees same-day shipping to be the big trend. Amazon is
testing this in 10 markets, and even specialty retailers are
trying it out.
Moosejaw, a Michigan-based outdoor clothing retailer, is
creating zones near its warehouse facilities where consumers can
get expedited delivery, says Kurt Heinemann, chief marketing
officer of Monetate, an e-commerce consultant.
His company also did a study for the Western retailer
Sheplers that showed targeted free shipping offers increased
sales and brought in new customers in areas where they were
having trouble competing. Offering geo-targeted free shipping
increased revenue by 20 percent, and increased new customers by
48 percent. "They discovered a way to crack the difficult
markets and increase marketshare,' he says.
3. Limited offers
At some retailers, advertised free shipping offers are only
for certain categories, like toys, or on certain days, but
everything else requires paid shipping. Free shipping discounts
may cancel out other offers that may actually have a higher
monetary value to consumers, like a 40 percent off deal. And
some sites require the input of a code to get the free shipping
deal, which allows the retailer to benefit from customer
Most retailers stop short of actually raising prices on
items offered with free shipping because it would sour the
relationship with customers too much, says Davis. "Whenever a
retailer asks me for advice, I say a race to the bottom is death
for any business," he says. "You're one click away from doing
price discovery somewhere else. Companies are not going to
develop relationships with customers that way."
4. Counting on price, instead
"Free shipping is the first thing people say they want, but
what they say and what they do are often different," says Davis.
Consumers want the item they are shopping for most of all.
So they will buy it from a retailer regardless of shipping
costs, if it's what they really want.
Even bargain experts fall prey to this. Andrea Deckard, who
runs the site Savingslifestyle (savingslifestyle.com),
hardly ever pays for shipping. But the other day, the
Cincinnati, Ohio-mom was ordering from Amazon, and ended up
purchasing a pair of CrossFit knee socks, a specialty item for
exercising, from a marketplace merchant, and paid for shipping.
"It was more of a convenience for me to get everything in one
spot," she said.
(Editing by Lauren Young and David Brunnstrom Follow us
@ReutersMoney or here)