Merchants Launch an All-Out Free Shipping War

The free shipping holiday melee has turned into a raging war and consumers are destined to win. So far, the gunfire has been hot and heavy.

    •  Last week, Walmart pulled out the big guns by providing free shipping on more than 60,000 online items during the holidays, with no minimum order or subscription registration required. The offer extends through Dec. 20, with a heavy focus on electronics and toys. The move was a clear attempt to wrest market share from e-commerce leader The founding father of free shipping deals is widely recognized for its Amazon Prime offer of free two-day delivery for an annual subscription fee of $79.

    •  Amazon sent a shot over Walmart's bow Thursday by saying it would meet or beat any free shipping deal out there. Read the fine print, however, and you'll find the matching offer applies to a limited selection of items.

    •  Up until recently, Best Buy had trumpeted free shipping on thousands of products. Wednesday, the electronics retailer said its offer is now valid on hundreds of thousands of items, including all CDs, Blue-Ray and DVD movies, gaming software and accessories. Strangely, such in-demand items as laptop computers, Apple iPads, iPods, netbooks and electric vehicles (?) are not included in the offer.

    •  Noticing Walmart's big push in their traditional territory, Toys "R" Us Monday began a free shipping offer on purchases of $49 or more for all items except video game consoles/handhelds, software, hardware and accessories.

In 2007, increased desire for similar holiday offers led founder Luke Knowles to create Free Shipping Day, a one-day event held this year on Dec. 17, during which an estimated 1,000-plus merchants will offer free shipping with delivery by Christmas Eve.

"The reason merchants are getting behind free shipping deals is no secret. A 2010 Accenture consumer holiday shopping survey showed free shipping is the biggest reason consumers continue to prefer shopping online. We created Free Shipping Day three years ago and didn't anticipate the overwhelming interest from consumers, merchants and national media. Now we know the opportunities are endless for both the public and merchants."

In an analysis of free shipping entitled "The Free Shipping eBook," Knowles noted this trend has been building for much longer than three years: "Amazon and Zappos several years ago demonstrated how effective a well-planned and well-executed free shipping campaign could be for increasing sales and market share, as well as creating positive buzz about their brands. Both of these merchants have replaced advertising with free shipping and gone on to dominate the online retail industry. We've also seen how small e-merchants have used free shipping to make inroads against large retailers. It's the only way some small retailers can compete.

As predicted in Knowles eBook, the big boys aren't the only ones shooting off their guns this holiday season. According to a eHoliday Survey, four out of five online retailers will offer free shipping at some point during the holiday season, and nearly one-third said they began their 2010 offers earlier than a year ago.

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