Holiday Spending: Just How Important Is Free Shipping to Online Shoppers?

  • Share
  • Read Later
Tom Grill / Getty Images

Increasingly, online shoppers won’t complete their orders unless free shipping is part of the deal. Nearly two-thirds of online purchases last week were shipped for free.

In November of last year, a New York Times story noted that 41% of online purchases came with free shipping—an impressive figure at the time, considering that free shipping was once a novelty, a rare unexpected bonus.

Since then, retailers such as L.L. Bean and Nordstrom have begun offering free shipping on all orders, no promotional code or minimum purchase required, while stores such as Best Buy and Walmart are shipping most or all items for free during the holiday season.

Even before Halloween was here in 2011, it was clear that free shipping would be a huge trend for the winter shopping season. In a National Retail Federation survey published over a month ago, more than 9 out of 10 retailers said they’d offer free shipping at some point during the holiday season. E-merchants are well aware that free shipping is in their best interests—because without it, consumers are less likely to buy, and with it, consumers are not only more likely to buy, but to buy in bigger ways. According to NRF data:

More shoppers this year are also interested in shopping online as a direct result of free shipping offers – 36.3 percent will spend more online this year if shipping comes free.

(MORE: What We Learned from the Black Friday-Cyber Monday Shopping Extravaganza)

Now, after an epic $52 billion shopping spree over Black Friday weekend, some of the effects of free shipping can be seen.

Market research firm ComScore has announced that during Cyber Week (week ending December 2), online purchases totaled $6 billion; a highest-ever $1.25 billion was spent online on Cyber Monday alone. This is particularly remarkable because the online spend-a-thon took place right on the heels of a dramatic rise in spending in physical stores over Black Friday weekend.

What role did free shipping play in enticing shoppers to spend (and spend and spend) last week? Well, over the last two weeks, over 63% of all online purchases were accompanied by free shipping—that’s up roughly 10 percentage points over the same period one year ago. In the ComScore survey, 78% of consumers said that free shipping was either “very important” or “somewhat important” when it comes to decision time to make an online purchase.

(MORE: Attention Online Shoppers: No Need to Pay for Shipping This Holiday Season)

Increasingly, if shipping costs extra, the online purchase just doesn’t happen. In a previous ComScore survey, nearly half of consumers (47%) said they’d abandon an online purchase if they discovered at checkout that shipping wasn’t included for free.

You can’t have a discussion about the free-shipping trend during the holiday season without mentioning Free Shipping Day, which has quickly become a tradition: This year, over 1,400 retailers will offer free shipping for orders placed on December 16.

Ironically, the trend toward more and more free shipping sorta makes Free Shipping Day unnecessary and obsolete: If shipping is available for free almost every day anyway, there’s really no need for a special day for getting free shipping.

(MORE: Now We’re Supposed to Have Two Christmas Trees?)

Last year, FreeShippingDay founder Luke Knowles said in a Q&A that about 60% of participating retailers were offering free shipping with no minimum purchase requirements whatsoever. This year, consumers can expect not only that the number of participating retailers will rise, but that the percentage of retailers with no-minimum-purchase requirements will as well.

Brad Tuttle is a reporter at TIME. Find him on Twitter at @bradrtuttle. You can also continue the discussion on TIME’s Facebook page and on Twitter at @TIME.

0 comments
Sort: Newest | Oldest