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How important is free shipping to e-commerce success?

May 29, 2014

Two recent reports illustrate a growing trend in the e-commerce sector: free shipping is becoming standard practice, rather than a perk.

Two recent reports illustrate a growing trend in the e-commerce sector: free shipping is becoming standard practice, rather than a perk.

According to a recent Business Insider report, which cited data provided by comScore, roughly 58 percent of all purchases made at online credit card payment processing pages during the first quarter of 2014 were shipped for free. That’s up 10 percent year-over-year, illustrating how quickly this practice is becoming expected as a baseline by consumers. 

The news outlet then cited data from the National Retail Federation that suggests that consumers are driving these increases, by aiming to purchase products only from the retailers that offer low-cost or free shipping options. Roughly two-thirds of all online shoppers noted that the availability of free shipping is extremely important to them when it comes time to select an e-commerce location to shop at. 

Brands aim to devise new ways of shipping their products, as well
Free shipping isn’t the only way brands are working to deliver their products on a more customer-friendly basis. For instance, Internet Retailer recently reported that Target would soon begin a pilot program for same-day shipping. Consumers in three different cities will soon be able to receive any products they order online prior to the afternoon sometime in the same evening.

“Based on our team member response and the feedback that they gave us, I think that this will also resonate with our guests, so I’m really excited to see where that goes,” said Kathryn Tesija, chief merchandising and supply chain officer, Internet Retailer reported.  

The company will be using its own brick-and-mortar store locations as fulfillment centers. Products will go directly from these Target retail locations to consumer’s doors.

“By leveraging the store network as fulfillment centers, we can offer faster, standard shipping, typically one to two days and provide access to store only items not previously available from Target.com,” she continued, according to the news outlet. “Later in the year, we plan to roll out standard across the country. We will continue to monitor results to determine further rollout plans.”

Internet Retailer also reported that eBay and Amazon are experimenting with similar programs. Clearly, the shipping options offered at online payment processing point of sale terminals is just as important as price points, products or any other factor when it comes to e-commerce. 

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