Free Shipping Index - 11/22/08

The number of free shipping offers this past week have increased quite a bit with 46% offering free shipping (either unconditional or tied only to what you spend).

I've also looked at comparing department stores to the prior year, and found that there is less free shipping this year (see end of this post).




The threshold spend for free shipping has decreased from last week (see chart below).





Some of the changes for this week (11/22 compared to 11/15):

New Free Shipping Offers This Week with conditions (most have $ threshold)
Armani Exchange - $100
J.C. Penney's $49
Macy's $99
Best Buy - $99
Bed Bath & Beyond - $100
Cooking.com $99
American Girl - unconditional
FAO Schwartz $120
Cabela's $99

Retailers with More Generous Free Shipping Offers
The Avenue - $100 to $75
Sony Style - $100 to unconditional
Staples was $50 now unconditional


Retailers with More Stingy Free Shipping Offers
Ann Taylor was $150 threshold to flat fee shipping $6
J. Crew was $150 threshold to none
PetSmart was threshold $75 now flat fee shipping $6

Upgrade
Several sites are using expedited delivery as a shipping promotion.
Harry & David - free express delivery Thanksgiving
Godiva - 2 day upgrade if over $60

Comparison to Prior Year

Comparing free shipping promotions of the top department stores from prior year, most have less generous free shipping offers than last year. (Note: the year ago period is Thanksgiving weekend, so that could skew results.)

The table below shows that except for Macy's, the department stores have more restrictive promotions this year than last year. (The numbers are threshold spend amounts to get free shipping.)

MERCHANTS | Yr-to-Yr | 11/22/2008 | 11/1/2008 | 11/24/2007
Saksfifthavenue | Poorer 200 150 unconditional
Nordstrom | Same 100 200 100
Neiman Marcus | Poorer 200 None unconditional
Macy's | Richer 99 None Product conditional
JCPenney.com | Poorer 49 69 25


These sites and several others are visually compared year-over-year in the presentation below.

Free Shipping Index - 11/15/08 Roundup

Overall the number of free shipping offers this past week have leveled off and the value of the free shipping promotions has decreased compared to last week.



The number retailers offering unconditional free shipping dropped from 7 to 4 and a the threshold spend for free shipping has increased over prior weeks (see chart below).




Some of the changes for this week (11/15 compared to 11/8):

New Free Shipping Offers
The Avenue $100 threshold
Ann Taylor $150 threshold
J Crew $150 threshold

Retailers with More Generous Free Shipping Offers
Nordstrom dropped threshold from $200 to $100
Polo kept $195 threshold but for smaller orders reduced flat rate from $10 to $5
Saks dropped threshold from $400 to $200
Fossil had $100 threshold and now is unconditional. (But still hidden at the bottom.)
Dicks was product conditional on limited products now $99 price conditional

Retailers with More Stingy Free Shipping Offers
Neiman Marcus - was unconditional, now $200 threshold
PBS was $60 threshold, now none
Nine West was unconditional to now $25 threshold
Bath & Body - from $50 threshold to $5.95 flat fee
FAO Schwartz was $120 threshold, now none
J.C. Penney was $69 threshold now none (but started a sale)
Tiffany was unconditional, now $150 threshold
Cabellas was $125 threshold, now none

Expect "Free Shipping" Searches to Double in the Next Two Weeks

If last year is any indication, expect consumer searches on "free shipping" to nearly double in the next two weeks.

Looking at Google's trend data, you can see the clear spikes in consumers searches for free shipping every holiday.



If you overlay the data to compare year-over-year, you can see that this year is on track to beat last year's trends.



Last year the top five weeks for the year were

Nov 18 2007 2.38
Nov 25 2007 2.68
Dec 2 2007 2.68
Dec 9 2007 2.60
Dec 16 2007 2.04

These numbers were up 70% over the early November numbers.

Don't wait for the media to report on it though. If you look at last year, the news reference volume clearly lagged the consumer searches.

Free Shipping - Save This Email

Chad White at the EEC covered an interesting promotion approach to free shipping. Orvis and others are asking subscribers to "save this email" so that they can clickthrough it later and repeatedly. The offer still expires on November 30th, but isn't available on their home page. It's a "members only" benefit of being in the email program.

More Retailers Offering Free Shipping Promotions

Retailers Offering Free Shipping Promotions Jumps from 31% to 41% in Two Weeks.

In a recent comScore study, 72% of consumers said that if an e-commerce site eliminated free shipping, they would use another e-commerce site that did offer free shipping. Last week the LA Times reported that this year, nearly 80% of consumers said they were more likely to shop online with a retailer that offers free shipping, compared with 60% who said that last year.

In the last two weeks a lot more retailers are jumping on the free shipping band wagon. This week 7 of the top 100 retail sites offered unconditional free shipping up from just 4 retailers two weeks ago. 34% offered free shipping if you spent a certain amount, up from 27% two weeks ago.



Still, there is a lot of change in free shipping week-to-week.

Compared to the prior week, many retailers raised their free shipping thresholds.

Best Buy eliminated free shipping this week (last week they had a $199 threshold.)
Bliss eliminated their free shipping over $75 offer.
H2O raised from $50 to $100.
GNC went from unconditional free shipping to a $50 spend threshold.

Meanwhile Sears introduced free shipping if you spend $99.

Overall the spending thresholds for free shipping with a spend condition looked like this:

Free Shipping Index - A weekly review of the top 100 retailers shipping promotions

Retailers know that free shipping is one of the most effective ways to entice shoppers to buy during the crucial Christmas season.

This year online retailers are paying more to ship goods to consumers, and many shoppers want to pay little or nothing for shipping.

shop.org’s 2008 Holiday Strategy & Planning Guide reports that according to consumers the top two promotions that made them shop in 2007 were free shipping offers:

#1 response “Free Standard Shipping without Conditions” 33%
#2 “Free Standard Shipping with Conditions” 28%

In the same study, the retailers response to what promotions were most likely to drive a purchase was again, free shipping

#1 response “Free Standard Shipping with Conditions” 36%
#2 “Free Standard Shipping without Conditions” 25%

This year may be the most competitive holiday season yet.

In order to help you navigate the choppy waters, we’ll be offering a few free tools to help you keep on top of competitors. The first is the “free shipping index”.

We partnered with the e-tailing group to track their e-tailing 100 sites. Each week we'll look at this representative sample of internet retailers for trends in shipping promotions as they happen.

This week only 6 merchants offered unconditional free shipping (i.e., free shipping with no basket threshold or product restrictions) while 27 offered free shipping if you spent above a certain threshold.



This was largely unchanged from the prior week when 4 merchants offered unconditional free shipping.



Three retailers introduced free shipping this week (Nine West, GNC and Road Runner Sports) while one dropped their free shipping promotion (Tiffany). Three that continued to offer free shipping were Zappos, Blue Nile and Famous Footwear.

In addition, 3 merchants reduced their thresholds for free shipping week-over-week.




Best Buy went the other direction, raising it's threshold from $99 to $199 while Circuit City kept their threshold at $24.

Several are experimenting with ~$1 shipping. Overstock offers $1 shipping on all products, while Walmart offers 97 cent shipping on apparel & toys.

Finally, if you are going to offer free shipping this season - don't hide it. Don't do like Fossil and hide it in gray text below the fold.

Black Friday & Cyber Monday - GET READY

The Thanksgiving weekend is less than four weeks away. There are many things you can do to drive increased revenue this holiday season. To see what your competitors did last year see the slide shows at the end of this post.

Thanksgiving weekend is traditionally very promotional - especially on Cyber Monday. Almost all retailers email on Cyber Monday, and most offer a promotion. If you aren’t promotional, you may want to mail on a different day so that you stand out from the crowd. Without an offer on Cyber Monday, your email will get lost. Last year 32% of retailers offered free shipping on all orders for Cyber Monday – in addition to other promotions (according to shop.org’s 2008 Holiday Strategy & Planning Guide .)

Use your home page and email to give customers information about offline Thanksgiving weekend shopping in your stores. Even if your online group doesn’t “get credit” for those sales, your customers expect that your website is an information source for ALL channels. Many consumers last year prepared for offline Thanksgiving weekend shopping by first consulting information online. Newspapers and catalogs are still important, but the shift online continues. According to shop.org 75% of consumers surveyed consulted the retailer’s Web site to research products and special offers before heading out to shop offline on Black Friday and 61% also consulted emails that they received from retailers for this purpose. Last year retailers missed the boat on their home page promotions to drive offline shopping - 43% sent emails with offline shopping information, but only 20% included messaging on their home page about offline offers and other related information. (See also the home page archive at the bottom of this post.) Get it right this year. Create a dedicated email and home page to specifically feature information for shoppers planning to buy offline – not just the promotions but also critical offline features like store pick up options, store locators, maps, directions and store hours. Try to find the store locator on many websites. It’s nearly impossible. Put a big button for store locators on your Thanksgiving Day site.

Give customers a good reason to shop online while brick and mortar stores are closed on Thanksgiving day.

Want to see what your competitors did last year? Check out these two albums with over 100 of the top internet retailers’ home pages for 2007 Black Friday and Cyber Monday.

Black Friday

Black Friday 2007 - Full Album on Picasa



Cyber Monday

Cyber Monday 2007 - Full Album on Picasa