Online shoppers love free shipping. And they love fast free shipping even more. Now, there’s an easy way to get just that: free two-day shipping on most purchases, with no membership fees or minimum buy requirements involved.
Increasingly, online shoppers demand free shipping before officially checking out and paying up at an e-retail site. In consumer surveys, “free shipping” is often singled out as a top “must-have” for holiday purchases made via the web. And increasingly, retailers are obliging shoppers with their demands.
According to a survey conducted for the National Retail Federation, 35% of retailers now offer free shipping year-round, compared to 23% a year ago. A report from Forrester Research stated that 92% of 50 top e-retailers offer free shipping in some form.
Understandably, the most popular free shipping offers come with some stipulations—minimum purchase requirements of, say, $50, and delivery that takes a week or more via standard ground service—so that retailers can keep their costs down. But if there’s anything that shoppers love more than plain old standard free shipping, it’s free shipping that’s speedy, and that has no caveat involving some minimum purchase threshold.
Increasingly, retailers and payment processing services are extending exactly this form of free shipping to entice consumers to bite as well. In early October, PayPal introduced a promotion giving free two-day shipping for customers making electronic purchases from Sports Authority, Levi’s, Dockers, and handful of other major retailers. There is no minimum purchase requirement, though using PayPal is part of the deal.
Similarly, a freshly announced partnership from American Express and ShopRunner allows shoppers to get totally free two-day shipping on orders from more than 80 retail sites, including Calvin Klein, Toys R Us, PetSmart, Tommy Hilfiger, and Eastern Mountain Sports. ShopRunner is similar to Amazon Prime in that both services normally grant unlimited no-cost two-day shipping for members who pay an annual fee of $79. However, with the new offer on the table, the usual ShopRunner membership fees are waived for subscribers who register an American Express card as their primary form of payment in their ShopRunner account. Current ShopRunner members can get a prorated portion of their annual fee refunded if they enroll an AmEx card.
The change is being introduced as a new policy, not a short-term promotion, so it looks like AmEx cardholders will be able to enjoy ShopRunner services for free indefinitely. The new policy could shake up the upcoming holiday shopping period in particular, as it’s likely that many shoppers will elect to sign up for a no-fee ShopRunner account to get simple, free two-day delivery on gift items.
Shoppers and analysts will be watching if and how Amazon responds to ShopRunner’s move. Now that it’s possible to get totally free two-day shipping with one-click purchasing from dozens and dozens of retailers, the prospect of paying $79 annually for essentially these same benefits from an Amazon Prime membership seems a lot less worth it. (Prime also includes access to Amazon’s video on-demand services, but first and foremost customers sign up and pay their fees to get the benefit of fast and free shipping.)
Thus far, Prime has been enormous success for Amazon, in that customers’ spending on the site typically soars after they become members. Recently, Amazon hiked its purchase threshold for free standard shipping from $25 to $35 for non-Prime subscribers at least partly so that a $79 Prime membership appeared like a better value.
Now that ShopRunner’s two-day shipping is free for anyone with an AmEx card, however, both the $35 purchase requirement and a $79 annual membership fee look pretty unappealing—and perhaps unnecessary.