Online customers like free shipping, and it pays to offer it, according to shop.org´s "Best Practices and Tips for a Successful Holiday in 2006." Retailers surveyed said they used conditional free shipping offers twice as often as free-gift-with-purchase incentives, which was the second most widely used promotion.
Retailers surveyed ranked marketing tactics, holiday promotions, and Web site features and tools for effectiveness, using a scale of 1 to 5, with 1 being the least effective and 5 being the most effective. They were surveyed regarding four retailing periods or "waves." The first wave is pre-holiday in late September; the second is just after the Thanksgiving Day weekend; the third is mid-December; and the fourth is post-season in early January.
Twenty-five percent of merchants polled used free shipping with no conditions and ranked its effectiveness 4-5, on average through wave four. All the averages included all four waves. Seventy-nine percent used free shipping with conditions and ranked the effectiveness 4-3. Forty-eight percent used free shipping with upgrade and ranked the effectiveness at 4.
One merchant told shop.org of initial plans to offer free shipping only to its e-mail list and via select co-marketing partners, but this merchant switched to Web site-wide free shipping because of early and aggressive discounting by competitors.
Heck, whose online buying decision hasn´t been tipped by an offer of free shipping? I know mine sure has. Shipping costs matter, particularly when shoppers can run to the mall and pick up the item they want.