Free Shipping: The Top eCommerce Incentive This Holiday Season?
This holiday season, it seems there is more attention on the free shipping offers of internet retailers as a promotional tool than any other promotion to entice shoppers to buy from their eCommerce websites. 61 of the top 100 internet retailers are offering free shipping this holiday season. The biggest announcement of free shipping was made by Walmart which made headlines in the news.
InternetRetailer.com reports that last year, the number of the top 100 internet retailers offering free shipping was 68, which means there is a decline in the number of retailers offering free shipping, but that just may be the top 100. Nevertheless, many small eCommerce businesses depend on shipping as a tool to make that extra margin per order as many ecommerce business owners rely on the shipping cost on orders to cover the shipping or make a profit from the shipping as you have to remember supplies do cost money and shipping is never free for anyone.
If you have an established customer base, you can use a model that Amazon has been using which they named AMAZON PRIME. Amazon prime is a membership program that gives users unlimited fas shipping (FREE two-day shipping and $3.99 per item) for an annual fee (membership) of $79.00. Another company set to roll out a similar program is Sears.com. This program makes tremendous sense for those internet retailers who offer thousands of products and have constant consumers purchasing from their website. Now, if you operate a niche eCommerce website, rolling out a program such as this may not make sense or be a very hard sale for the consumer.
What are your shipping strategies for your eCommerce store during the holidays and moving into 2011?
Pablo Palatnik is in the marketing dept of Fortune3, a shopping cart software company.
3 Comments
John Lindberg says:
I own a fulfillment company and our strategic planning these days is focused on improved processing efficiency and aggressive cost reduction leading to reducing our shipping costs and fees.
The answer is automation and better warehouse utilization plus improved technical integration between shopping carts and today's sophisticated package processing systems.
We are doing this because we see the urgency among our webstore merchant clients to offer free shipping or low fixed price shipping to compete in the market conditions you describe in your article.
I think you are quite right...free shipping is here to stay and that means waste and inefficiency has to be squeezed out of the order fulfillment process no matter if outsourced or in-house.
John Lindberg - President
EFULFILLMENT SERVICE INC
Pablo Palatnik says:
Hi John,
Thanks for the comment and you're headed in the right direction with your planning.
iPhone Application Development says:
Still now i don't think about the free shipping. I have online mobile store and selling different brands mobile and my target is local area. But i am confused with shipping strategy. I am not able to find the proper strategy for this, i mean to where i extend it in terms of kilometers. Do you know what can i do?
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