So You Want More Free Shipping? You Got It

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If there’s one thing e-retailers hate, it’s shopping cart abandonment. Shoppers fill up their virtual carts and then fail to follow through on the purchase quite frequently. While there are many reasons why this happens, one of the most obvious is the failure of the seller to include free shipping—which many consumers have come to expect nowadays.

Based on what’s happened in prior holiday periods, shoppers can head into the 2012 holidays with some expectations that are extremely likely to be met. For instance, there will be sales — big sales. According to a new Deloitte survey, 44% of shoppers say they will only buy items that are marked down from their original price—because they fully anticipate just about everything will go on sale at some point.

Similarly, shoppers have come to expect a multitude of free shipping offers to pop up periodically or be available for the duration of the holidays—and beyond, in most cases. Over 90% of major retailers offered some form of free shipping, at some point during the holidays of 2011, and about the same percentage plan to do so again this year, according to the National Retail Foundation. Even that doesn’t appear to be enough to satisfy shoppers, however. In a study commissioned by UPS, when consumers were asked to name the aspect of shopping they want to see improved by retailers, the top answer was “free/discounted shipping.”

(MORE: 4 Ways You Pay Too Much — And What to Do About It)

It seems like retailers have been listening. Shop.org, the online division of the National Retail Federation, surveyed retailers and found that they’re especially likely to emphasize free shipping during the holidays ahead. (The survey results are summed up well at InternetRetailer.com.) In particular, retailers are focusing on the most generous free shipping offers of all, in which there are no minimum purchase requirements to meet in order to get complimentary delivery. Overall, 30% of retailers said they’d have free, no-strings attached standard shipping, compared to 16% a year ago.

During the holiday season of 2010, it became common for major retailers to offer free shipping with few catches, and the trend continued in 2011. Retailers such as L.L. Bean and Nordstrom have also concluded it’s in their best interest to offer free standard shipping, with no minimum purchase, throughout the entire year—joining free-shipping, pure e-retailers like Zappos and 6pm.com in the process.

Shoppers have also come to expect free shipping via ShopRunner and Amazon Prime, both paid membership services—so they’re not really free—that provide free unlimited two-day delivery on all sorts of online purchases. Increasingly, purchases made via eBay are also being shipped for free. Bloomberg News reports that in the third quarter of 2012, 50% of eBay merchant transactions offered free shipping as an option, up from 39% for the same period in 2011. What’s more, eBay and FedEx have just come to an agreement that would give eBay merchants a discount on shipping of as much as 37% and to print FedEx labels at home—making it much easier for the merchant to include free delivery (and to compete with Amazon too).

(MORE: Unhappy Holidays? Lackluster Season Expected for Key Shopping Categories)

Of course, the truth is there really is no such thing as completely free shipping. Someone has to pay for delivery services. Consumers increasingly prefer that someone to be the seller, who has factored in the added costs of shipping—and is likely to already be passing those costs along to customers in the form of higher prices. In any event, shoppers seem to like the idea that they’re getting something for “free,” even though they’re paying for the privilege.

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.

2 comments
GaryMcCray
GaryMcCray

Savy Internet shoppers comparison shop fully aware of shipping prices and simply add those to the listed price.

They also tend to avoid those Internet sites that do not or will not disclose their shipping rates up front.

Amazon, especially Amazon Prime shipping often, but not always results in a better than average deal and now that they are charging tax, it is often worthwhile to look further afield in any case.

blitz120
blitz120

The problem with not including shipping in the pricing is that it makes comparison shopping quite difficult.  Many websites show artificially low prices, but then add exorbitant shipping charges to compensate -- and such activity makes the shopper wary of the ethics of site operators.   Providing these charges up front levels the playing field and keeps everything above board.

Another reason for shopping carts to be abandoned that isn't addressed are sites that withhold the price of an item until it is added to the shopping cart.  This means that many shopping carts are created/filled before an actual intent to purchase is created.  Rather than empty the site when a price does not meet expectation (which does take effort), shoppers often simply abandon the carts.

 If retailers were to eliminate these two practices, they would discover far fewer abandoned shopping carts.