Happy Free Shipping Day.
Or is it?
For many online shoppers, a free shipping offer is the holy grail of deals. Forget 20 percent off an item or a coupon for a future discount: free shipping is what makes people click the “buy” button.
And today, the fourth annual Free Shipping Day, could mean banner sales for the more than 2,200 merchants that have signed on.
Internet marketer Luke Knowles hatched the idea for Free Shipping Day after reading several years ago that 90 percent of consumers buy more when offered free delivery. On Free Shipping Day in 2010, Internet non-travel retail spending hit $942 million, the third-highest one-day total ever.
There’s no doubt that free shipping is a significant force in online retail sales. In a recent comScore poll, 42 percent of respondents said it was “somewhat important” to “actively seek out shipping deals,” while more than one-third (36 percent) said it was “very important” and “would not make a purchase without it.” And more shoppers are taking advantage every year: For the week ended December 4, comScore estimated 63.2 percent of all online retail transactions included free shipping, a full 11 points above the comparable holiday week in 2010. (Even during the rest of the year, levels top 40 percent.)
This “negative” cost for the consumer can come at a notable price for the small business owner, who often tentatively skates on ultra-thin margins throughout the year in the hopes of tipping annual profit into the black come December. So what are the costs behind the costs — is there a dark side to free shipping?