The Retail Shipping Wars

John Scott
Posted by in Retail

Thousands of retail websites compete against each other for new customers each year. As a result, retailers must use cheap shipping, sales, and other special promotions to attract new customers and retain previous buyers. Many retailers even offer free shipping to attract shoppers during the all-important holiday shopping season. As a retail professional, you must understand how to use these promotions to generate more sales without hurting your company's profits.

Katherine Poythress of UT San Diego says retailers are using free shipping offers to convince customers to do some early holiday shopping. Although many retailers already offer no-cost shipping on every order, some stores are making this offer more attractive by promising customers shorter delivery times. According to, more than 16 percent of online retailers will offer their first cheap shipping deal by the end of October. Paypal is even getting in on the holiday shopping action by offering free two-day shipping on orders placed with some of the company's partner brands.

Offering cheap shipping is a good way to appeal to any shoppers looking for added value in their purchases. People are more likely to order low-cost items if they can get free or cheap shipping. People also tend to spend more when a cheap shipping promotion is in effect. Retailers offer cheap shipping during the holiday shopping season because it's the most important time of year for many companies. November and December sales account for anywhere from 20 to 40 percent of some retailers' sales for the entire year. Because Thanksgiving is later than usual this year, companies are using cheap shipping and other promotions to make more money during the shortened holiday shopping season.

Amazon is known for offering standard delivery at no charge for shoppers placing orders of $25 or more. In a surprise move, the retail giant increased the minimum order from $25 to $35 as of October 21. Company officials were very quiet about the policy change, but shoppers quickly shared the information with each other via online shopping forums and other websites. Industry experts speculate the move was designed to prompt people to purchase Amazon Prime membership. Members are entitled to free two-day shipping on all Prime-eligible purchases. Some people might avoid shopping at Amazon due to the increase, but most expect Amazon's sales will actually increase because of this change in the company's shipping policy.

The holiday season is fast approaching, so now is the time to publicize the special promotions you developed during the summer and early fall months. If you want to attract new customers to your retail website, offering cheap shipping is a good start. This type of promotion is a great complement to discounts and other special promotions available during the holiday shopping season.


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