How Important is Free Shipping this Holiday Season?

As retailers rush to get their online holiday offers out early, many are missing out on a major selling tool that drives web shoppers to buy: free shipping. While nearly 35 percent of retailers polled by said they offer free shipping all year, the majority do not. On a positive note, of the retailers that do not offer free shipping year-round, 16.3 percent said they would begin offering it as a holiday promotion the last week in October. Why is it that retailers do not recognize the importance and value of free shipping on Cyber Monday and throughout the holiday season? I am an avid user of comparison shopping engines, particularly Google Shopping. If I find that the gift I am eyeing is offered at around the same price from two different retailers and one offers free shipping, it is a no-brainer which site I will choose. I am not brand loyal, for the most part, and I imagine many other savvy online shoppers share similar views. To convince retailers of the value of free shipping, another recent study from MarketLive found that 91 percent of online shoppers said they would take advantage of free shipping offers. “Online shoppers have become quite savvy. They have come to expect free shipping,” Ken Burke, chairman of MarketLive, wrote in the report. Importantly, 31 percent said free shipping is an incentive that would prompt them to pay full price for an order. Retailers can’t beat that: consumers are willing to pay a premium for their products to not deal with shipping charges. And shoppers don’t expect free shipping only during the holiday season. In the UPS and comScore “UPS Pulse of the Online Shopper” report released earlier this year, 68 percent of shoppers surveyed said free shipping is the top driver of positive recommendations for an online retailer. In turn, 59 percent said the top driver of negative comments was shipping costs that were too high, based on the product price. Importantly, 88 percent of online shoppers said they have abandoned a cart in 2013, primarily because of shipping costs. 54 percent abandoned their carts after the shipping costs made their total order more than anticipated. Besides free shipping, there are other factors at play in how consumers feel about e-commerce this holiday season. 87 percent of consumers surveyed by MarketLive survey said that retailers’ top customer service priority should be guaranteeing that merchandise will be delivered by the date promised. In addition, the option to buy or reserve a product online or via their mobile device for pickup in stores is the shopping feature that is “most” or “second most” important to 72 percent of shoppers.