The Free Shipping Dilemma – the 2008 Holiday Shopping Results

Free shipping has been the most popular promotional offer among online shoppers. According to 2007 Forrester Research, 61% of online shoppers preferred to shop with a retailer that offered free shipping than one that didn’t. High demand encouraged most online retailers to win customers’ hearts by offering free shipping – either on minimum purchase or without conditions.

Because of the fast approaching economic crisis and rising gas prices (and hence increasing shipping rates), some experts believed most merchants would fail to offer free shipping this year:

…rising fuel costs will make free shipping much more expensive for online retailers this holiday season and will likely limit the amount of offers or lead to an increase in the dollar threshold level.

The dilemma looks as follows: the demand is growing (nearly 80% of online shoppers wanted to be offered free shipping this year versus 60% in 2007) while the profit is declining.

Now that we can look back at 2008 Holiday season, how popular was the free shipping offer this year?

Luke Knowles, the founder of FreeShipping.org and the author of the Free Shipping eBook, launched an interesting experiment right before Christmas. He encouraged online retailers to participate in Free Shipping Day and to offer free expedited shipping (both unconditional and with minimum purchase) a few days before Christmas with guaranteed delivery by the holiday.

The response was overwhelming – according to the eBook:

  • More than 250 merchants participated: both huge and smaller retailers chose to participate.
  • Hundreds of websites, newspapers, radio stations and TV stations helped spread the word about Free Shipping Day.
  • Over 100,000 visitors to www.FreeShippingDay.com on Free Shipping Day (Dec, 18).
  • Over 250,000 visitors to www.FreeShippingDay.com since the site went online December 8th.

Looks like, free shipping offer has been highly popular this year no matter what. I would love to see the stats for this year revealing how many retailers offered free shipping compared to the last year.

I know on most all of my personal retail online stores I have always offered free shipping and it seems to do the trick.  You have to make it easy and less confusing for your potential customers when it comes to shipping and taxes.  If they can compare shop you – and the price you have on your site is what they will pay because you are offering free shipping and no taxes etc., then you will be the one they go with because its easier.  I love this method and will continue to use it as long as I run online businesses.

Image by Cosmic Kitty

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