For holiday shoppers, free shipping has gone from perk to priority.
Shoppers don't just like it. They increasingly expect it. So, at least for the holidays, online retailers are scaling back minimum purchases and other requirements that have accompanied free shipping offers of the past.
Nearly a third of online retailers plan to offer free shipping without any conditions at all this holiday season, according to the National Retail Federation.
Many see no other choice, said Luke Knowles, founder of FreeShipping.org. “If a competitor offers it, you have to do it,” Knowles said. “It's the No. 1 promotion that shoppers respond to.”
Indeed, 85 percent of shoppers prefer free shipping without conditions to other promotions, according to MarketLive Inc., an e-commerce services company in Petaluma, Calif.
Policies have evolved. Several years ago, the typical promotion included a minimum purchase, perhaps $100, and a discount code provided by the retailer or found on coupon code sites such as RetailMeNot.com. Then retailers started dispensing with the promotion code.
Chad White, research director at marketing software company Responsys, said that, last year, many retailers started offering free shipping with no minimum purchase in mid-December.
This year, many offered no minimums on Cyber Monday, including J. Jill, J.C. Penney, Sportsman's Guide, Eddie Bauer, Home Depot and Bass Pro Shops.
Best Buy expanded its free shipping this season to include no minimums on nearly every product through Jan. 2. “We see it as a way to delight our customers,” said Scott Durchslag, president of BestBuy.com. “We saw an increase in order value, too.”
Target introduced free shipping last year for all Redcard holders, now a year-round promotion. This season, it's considering whether to expand the program to include free shipping on essentially all items from Dec. 12 to 19 for all customers, said Target.com spokesman Eddie Baeb.
Durchslag said that, while free shipping can increase sales, for Best Buy it's also an investment. “It's a financial commitment, and we have to budget for it,” he said. “But if the customer has a great experience, they're more likely to return.”
Surveys suggest that free shipping puts shoppers in a better mood, which may lead them to spend more. Where free shipping was offered during the last week of November, customers spent an average of $137 per order, according to the National Retail Federation. Without free shipping, the tab fell to $91.
As free shipping becomes the standard, some retailers are taking it up a notch by offering free shipping on returns. It's highly popular with higher-end clothing or shoe retailers.
Nearly 40 percent of clothing and shoes purchased online are returned, but retailers are realizing that free return shipping increases sales. It removes one of the biggest barriers to shoppers' purchasing apparel online, said Knowles of FreeShipping.com.
Nordstrom offers free return shipping year-round, and Saks and Neiman Marcus offer it during the holidays.
Iowa-based retailer Von Maur has offered free shipping from its stores since 1914, and started permanently offering free online returns Nov. 21. “Our customers can feel more confident buying with free return charges,” said Melody Westendorf, chief operating officer.
Mid-line retailers such as Banana Republic, Gap and Old Navy are taking up the cause during the holidays, offering free return shipping for purchases of more than $50. Retailers such as Coldwater Creek and Land's End are testing the waters by offering free returns for a limited time on selected items.
Consumers holding out for a freebie can wait until Free Shipping Day on Dec. 17, when nearly 3,000 retailers are expected to offer free shipping. Delivery is guaranteed by Dec. 24 within the continental United States.