Free shipping a necessary evil this holiday, says Jupiter Research
Free shipping and handling promotions are now a necessary evil for online retailers who want to compete this season, and they can represent a significant cost for merchants, according to data from Jupiter Research Inc. But a new consumer survey from the research firm shows a silver lining of sorts that could help reduce the cost of such promotions to merchants: Most consumers are willing to wait as long as 10 days for their orders to arrive if shipping and handling are free. In a recent survey, only 24% of online shoppers were unwilling to wait 10 days for to get free shipping.
“Online shoppers are willing to give retailers a high degree of leeway in delivery time,” says Jupiter senior analyst Ken Cassar. “While consumers value the immediacy that buying in a brick-and-mortar store offers, once they have accepted that they will not be able to walk away with the item immediately after purchasing it, they become quite forgiving.”
That willingness to be flexible offers online merchants a way to reduce costs in providing free shipping. When retailers can batch regional orders and delay shipping until they can deliver a full truck to regional centers of carriers, for example, they’ve reduced fees charged by the carrier by initiating shipping from deeper in the carrier’s distribution chain. Greater flexibility in shipping times also lets retailers schedule warehouse staffing more effectively and reduces their overtime costs. In addition, carriers will charge retailers less for slower shipping methods, Jupiter notes.
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